Internet grocer Peapod acquires Streamline.com operating assets
E-commerce and home delivery service accelerated at Ahold USA
Zaandam, The Netherlands / Chicago, United States; September 7, 2000 - Peapod Inc., the prominent U.S. internet grocer in which Ahold has a 51% stake, has agreed to acquire various assets of Streamline.com, a U.S. on-line shopping and delivery service based in Westwood, Massachusetts, with annualized sales of approximately USD 35 million. Peapod will pay approximately USD 12 million for Streamline.com’s operating assets, including facilities in the Washington, D.C./Baltimore markets where Giant-Landover, a wholly-owned Ahold subsidiary, has many of its stores. The transaction will accelerate the development of Giant-Landover’s
e-commerce and home delivery services to its customers.
Peapod enters Baltimore-Washington, D.C. market
The acquisition of Streamline.com’s Washington, D.C. operations will enable Peapod to start service under the Peapod brand in the Baltimore-Washington area as of the fourth quarter of 2000, earlier than originally planned. Simultaneously, Peapod will withdraw from the Texas and Ohio markets as part of its overall strategic plan for growth and future profitability.
Remarks by Marc van Gelder, President & CEO Peapod
‘As Peapod’s immediate growth focus is along the East Coast and in Chicago, we have taken a major strategic step by purchasing Streamline.com’s Chicago and Washington, D.C. operations and by exiting Texas and Ohio,’ said Marc van Gelder, president and chief executive officer of Peapod. ‘This acquisition will speed time-to-market entry in Baltimore and Washington while providing state-of-the-art facilities, including expansion space for our Chicago operations.’
Background
At the end of June 2000, Ahold acquired a 51% equity interest in Peapod. In addition to leveraging Ahold’s strong retail brands along the U.S. east coast, Peapod has entered into a supply and services agreement with Ahold that enables Peapod to purchase products more efficiently,
an important competitive advantage. Peapod has been working with Ahold-owned Stop & Shop since June this year to service southern Connecticut communities and the Boston metropolitan area.
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Peapod
With sales of approximately USD 73 million, Peapod provides consumers with grocery delivery service from, among others, former mezzanine storage areas in Ahold stores. These have been converted into efficient ‘fast pick’ fulfillment centers and several of them are now fully operational. Peapod, founded in 1989, will utilize Ahold’s real estate assets to open over 50 of these centers in the coming years. This “clicks and mortar” strategy enhances Ahold and Peapod’s customer service. Acquiring Streamline.com’s operating assets boosts the number of Peapod customers to over 200,000.
Ahold USA
As part of its multi-channel strategy, Ahold operates food retail, foodservice and e-commerce activities in the United States with annualized sales approaching USD 32 billion. Through five operating companies along the U.S. eastern seaboard, Ahold operates over 1,100 stores with
1999 sales of USD 20.3 billion. In addition, U.S. Foodservice, Ahold’s wholly-owned nationwide food distributor, will generate sales approaching USD 12 billion upon completion of its acquisition of PYA/Monarch, announced last month.
Royal Ahold
Royal Ahold, the international food provider, operates approximately 7,000 supermarkets, hypermarkets and other store formats in the United States, Europe, Latin America and Asia with annualized sales of over Euro 50 billion. The company is also active in the foodservice sector and as an e-commerce player. Ahold employs approximately 350,000 associates and serves the food needs of over 30 million customers in 23 countries every week. Ahold’s website can be found at www.ahold.com.