Food Fight! Food Fight!

By Chris Taylor

High shelves and horrible muzak. Aisles littered with squashed grapes and spilled cornflakes. And those gosh-darned carts that never steer straight. Yep, for most of us, the experience of grocery shopping still ranks somewhere between having a tooth pulled and changing a diaper.

But not for Liz Stone, a 33-year-old mother of two in Evanston, Ill., who pointed her mouse at Peapod.com a year ago and never looked back. "It has changed my life," she says. "Instead of running into a store with a kid under each arm, trying desperately to avoid a meltdown, buying 20 things I didn't want, I've got the time to think about what I need. It's made me a better shopper."

So why are so many of us stuck with cascading cans of soup and a two-year-old's tantrum in Aisle 6? The fact is, online supermarket shopping is in its infancy, and most of the $440 billion we spend annually filling the pantry goes to traditional grocers. Naturally, they are less than enthusiastic about giving that business up. "We're going to fight for every food dollar," says Michael Sansolo of the Food Marketing Institute, which represents the grocery establishment.

Indeed, supermarkets are fighting back with their own Net groceries that emphasize name-brand trustworthiness. Take Maine-based Hannaford Bros., which owns Shop 'n' Save stores across the Eastern U.S. Hannaford set up HomeRuns.com which has upped the ante by offering a double-your-money satisfaction guarantee. It's already doing brisk business in the Boston area. That's no mean feat. Boston is a nasty little incubator of Web grocers and boasts four firms in cutthroat competition; one company, Streamline, will pay to install a fridge in your garage, allowing the Web store to make unattended deliveries.

Currently, though, Beantown is the exception. Even Peapod, the oldest and most widespread Web grocer, is available to only 8% of the U.S. population. "It's taken quite a while," admits Peapod CEO and president Bill Molloy. "Early on, people felt they didn't deserve this service yet. How could they tell their parents they didn't want to go to the store?"

This long national nightmare of grocery guilt seems to be ending. Molloy thinks we will see a coast-to-coast Web-grocer conglomerate within four years, though he hesitates to say if it's going to be his company, which took a $9.4 million loss last quarter.

Picking a winner in this market is a tough call, in part because each pioneering e-grocer has a different idea about what kind of goods you want and when you want them. At the basic end of the scale, Netgrocer.com wants to send you nonperishables like cereal or juice in a FedEx box sometime in the next four days. At the other, San Francisco-based Webvan will bring you hideously perishable stuff like ice cream and iceberg lettuce within a 30-min. window.

These companies don't always manage it, but you've got to give them points for effort. Webvan boasts that its 330,000-sq.-ft. warehouse is so meticulously organized that no packer has to walk more than 19 1/2 ft. in search of a product. Now, post-IPO, the firm is set to build 26 warehouses across the country at a cost of $1 billion.

Not every webhead is working against the established grocers. Priceline.com the site that lets you name your price for airline tickets, is doing the same for groceries in Manhattan and Philadelphia; it expects to go national by next May. The catch: you still have to push a squeaky wheel around terrazzo flooring and pick up the items yourself. Savings kick in only at the register.

Priceline founder Jay Walker says his biggest customers are seniors, college students and parents with small children, who have the impetus to navigate the bidding process for the average $12.75 it will save them on a basket of 10 items. "For some families," he says, "that's the difference between putting meat on the table once a week and three times a week."

But most Web grocers sniff at the Walker model. Their customers are so in love with delivery, they don't even miss manhandling the fruit and vegetables. "I never knew what I was sniffing for in a cantaloupe anyway," says Molloy. Liz Stone concurs. These days, she only sets foot in a regular grocery store about once a month, for the odd item she forgot. "When we do go now, it's like a treat for the kids," she says. Children who actually enjoy supermarket shopping? The wonders of e-commerce will never cease.