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HomeGrocer plants roots in Southern California

The online grocery service expands its presence in Orange County, but it is already shopping a much bigger market: Los Angeles. expanded its presence in Orange County today, but the online grocery service is already shopping a much bigger market: Los Angeles.

The Kirkland, Wash.-based company's next move will be into the Southern California mecca, beginning with a warehouse already under construction in Azusa, Calif., to service part of the market, company president Terry Drayton said.

Although Drayton didn't specify when HomeGrocer would begin serving the Los Angeles area, he did say the new warehouse would open late this year or early next year.

The expansion plans come as HomeGrocer races against rival Webvan to attack new markets. Webvan plans to enter 26 markets during the next two years as part of a whopping $1 billion expansion.

Earlier this month HomeGrocer received $100 million in venture funding, which the company plans to use to develop new facilities. The company intends to open 30 new distribution centers throughout the next year, expanding into the Northeast and other areas of the country.

Drayton spoke with CNET on his way to Fullerton, Calif., to celebrate HomeGrocer's grand opening of a new distribution center there. The Fullerton facility is the company's second in Orange County and will allow HomeGrocer to cover the entire county, Drayton said.

The two distribution centers in Orange County and the upcoming facility in Azusa--northeast of Los Angeles--are part of HomeGrocer's Southern California expansion plans. Drayton said the company will continue to increase service in the area.

"We'll end up having multiple facilities to service the Los Angeles area," he said.

Previously serving customers in the Seattle and Portland areas, HomeGrocer expanded into Orange County in September when it opened its first distribution center in Irvine, Calif.