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HolidayBuyer's Guide
Tech Industry

Webvan running out of Thanksgiving goodies

In one of the first signs of the holiday shopping crush, a flood of customers begins emptying the online grocer's shelves of Thanksgiving staples and at times slows the site to a crawl.

In one of the first signs of the holiday shopping crush, a flood of customers began to empty Webvan's shelves of Thanksgiving staples on Monday and at times slowed the site to a crawl.

The largest online grocer saw its Oakland, Calif.-based operations run out of pumpkin-pie filling, some gravy products and turkey stuffing. When customers tried to order those goods, a message popped up saying they were out of stock.

The torrent of shoppers also caused some longer-than-normal delays in turning pages on the site, two customer service representatives said.

Webvan spokesman Bud Grebey said the site, which was redesigned two weeks ago, was meeting expectations.

"We have not experienced any significant (complaints) to our customer service center," said Grebey, spokesman for the Foster City, Calif.-based company. "We continue to see a high volume of traffic as people order their Thanksgiving meals through Webvan."

As with football, the fourth quarter is crunch time for e-tailers. During the holidays Web merchants are blitzed by huge increases in the number of visitors and increased sales.

According to Internet research firm PC Data, Webvan's traffic on Saturday more than doubled from the week before. The number of shoppers jumped from 144,000 unique users to 294,000, said PC Data spokesman Jim Carey.

Besides bulking up their Web sites to ensure customers can swiftly move around, merchants must shore up their fulfillment units so they can quickly deliver goods.

It is crucial that companies perform well during the holidays because a good experience can turn a first-time visitor into a year-round customer. Moreover, investors closely watch e-tailers' performance in the fiscal fourth quarter.

Analysts predict that this holiday season will decide whether many online stores survive next year.

Webvan will welcome the spike in traffic. The company has embarked on a make-or-break mission to prove its business model by becoming profitable at its San Francisco Bay Area operations.

The company has come under fire recently for missing its goal of breaking even in the Bay Area. On Friday, a system glitch prevented some San Francisco shoppers from buying on Webvan's site.