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Friday, March 31, 2000

Isle merchant
to launch
’Net shopping
for groceries

The site aims to be
fully functional by April 7

From staff and wire reports


ONLINE grocery shopping, which is gaining attention across the nation, will come to Oahu at the end of next week with the start of

Shoppers with an Internet connection will be able to browse the store online and fill their market basket by a series of mouse clicks, having the goods delivered to their home or office in a couple of days.

And while the business has its critics, particularly those who don't want to buy anything without first picking it up and feeling it, satisfaction runs high among online grocery shoppers, national experts say.

Bill Sankey, a Honolulu custom woodworker and cabinet maker who once worked in a family fruit stand, says he can understand the need to inspect before buying. But he said his fill a niche for those who have better things to do with their time than spend it in grocery stores. Sankey made supply arrangements with wholesaler Fleming Foods and other suppliers and will make deliveries three to five times a week in the most populated areas, once or twice a week elsewhere. Delivery will be free for orders of $75 or more, $10 per trip for lesser amounts. "If you want a $13 bag of potato chips we'll supply it," Sankey said.

His prices will be competitive with those of walk-in grocery stores because he will have much smaller expenses, Sankey said. And he said shoppers will be able to exercise preferences to make special requests in addition to pointing and clicking at their computers. "There'll be a space where, if you order four tomatoes, you can type in something like 'please make two of them slightly green, the others fully mature,' " Sankey said.

The Web site will be fully operational by April 7, he said.

With Inc. about to launch an initial public offering and a number of online grocery firms already trading publicly, Wall Street analysts have been rethinking the business and ask whether any online grocer can ever make money. Online grocery sales are quite small, totaling about $200 million in 1999, less than 1 percent of the $440 billion in total supermarket sales, according to New York-based Internet research firm Jupiter Communications Inc.

The business is expanding fast, with many Web grocers moving into the nation's larger metropolitan areas. Jupiter estimates sales will rise to $800 million this year and grow to $7.5 billion by 2003.

Supermarkets -- both online or traditional stores -- have razor-thin margins, so they must sell huge volumes of goods in order to be profitable.

But Sankey, Hawaii's first online grocery operator, says he does expect to make money. Although he does plan to have his own warehouse later, he doesn't need the sprawling real estate that supermarkets have and he doesn't need as many employees, he said.

A recent survey of 1,708 Internet consumers by Greenfield Online, a Wilton, Conn.-based market research firm, found that only 31 percent of respondents had ever visited an online grocery site. Of those who had, only 12 percent actually bought something.

The Associated Press and Star-Bulletin reporter
Russ Lynch contributed to this column.

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