| Industry | Online retailer |
|---|---|
| Fate | Taken over by Webvan in 2000 |
| Founded | 1997 |
| Defunct | 2000 |
| Headquarters | Bellevue, Washington, then Kirkland, Washington |
| Key people | Terry Drayton (CEO) |
| Employees | 2400 |
HomeGrocer.com, Inc. was one of the first online supermarket businesses, started in 1997. It was founded by Terry Drayton.[1] Buoyed by investments from Kleiner Perkins Caufield & Byers, Amazon.com, John Malone of Liberty Media, Martha Stewart and Jim Barksdale, HomeGrocer.com built and operated the first fully integrated Internet grocery operation. Unlike previous start-ups, HomeGrocer.com did not operate out of existing supermarkets instead it built dedicated facilities where inventory was stored, orders picked and deliveries made. The first 50,000 sq ft (4,600 m2) facility opened in Bellevue, WA in early 1998 modelled on Costco and with low levels of automation. The product selection was a complete alternative to the traditional supermarket at comparable prices with an earned reputation for top quality fresh produce, seafood and meat. Deliveries were made in custom tri-temperature trucks with the distinctive HomeGrocer.com peach logo. Customers support was very strong and new facilities were opened in Portland, OR in May 1999, in Renton, WA in September 1999, in Irvine, CA in October 1999, in Fullerton, CA in January 2000, in Carson, CA in February 2000 in Asuza, CA in March, 2000, in San Diego, CA in April 2000 and in Dallas, TX in May, 2000. Each of these new facilities operated 7 days a week and were 100,000 sq ft (9,300 m2) with 50 delivery vehicles and a staff of 200. Daily sales reached over $1M day by June 2000. A total of 16 additional HomeGrocer.com facilities were under construction in markets including Atlanta, GA, Chicago, IL, Washington, DC. and Denver, CO.HomeGrocer.com developed all of its technology from its award winning website, its wireless picking systems that used WiFi, its driver "smart phones" all years before they were mainstream.[1]
HomeGrocer.com completed a $288M IPO in March 2000 underwritten by Morgan Stanley but, with a need for more capital and nobody prepared to finance dot-com companies at any price, had insufficient capital to complete its aggressive national rollout. In September 2000 stockholders approved a buyout by the cash-rich competitor Webvan of the much larger HomeGrocer.com. Webvan got rid of all the key staff and spent more than $20M rebranding from the HomeGrocer.com logo to the Webvan logo and moving to their technology. The Webvan technology did not work very well and as HomeGrocer.com facilities were converted sales immediately declined by over 50% and never recovered. Webvan spent over $500M before going bankrupt less than a year later.[2][3]
HomeGrocer exists today, but no longer sells perishables, such as fruits, vegetables, milk, and yogurt.[2]
Homegrocer.com [3]