The US based on-line grocery service operated by Webvan Group
Inc. has ceased trading and announced its intention to file for
bankruptcy. The company has struggled financially since its IPO in
November 1999, when it was valued at $8.7 billion.
Webvan’s demise reflects the poor public uptake for grocery
sales by on-line merchants. Several of its competitors have been
forced to take precautionary measures to ensure they do not suffer
a similar fate. For example, on-line grocers Peapod became a
majority shareholder in an off-line Dutch retail company in order
to benefit from the advantages of “click and mortar” resources.
It appears that the most successful strategy for grocery sales
over the internet combines the experience of traditional retailers
with the innovation of modern technology. In the UK several
supermarket chains now operate on-line delivery services, including
Tesco, Sainsbury’s and Asda.
