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THE CUTTING EDGE's Promotional Campaign Delays Deliveries by a Day


Don't hold your breath for that carton of milk and head of lettuce.

Customers nationwide who use online grocer were forced earlier this week to schedule their deliveries for as much as a day later than usual because a recent promotional campaign led to a surge in new orders that taxed the company's delivery channels, an executive of the Kirkland, Wash.-based site said Wednesday.

Online food shoppers placing an order on the company's Web page can usually pick a delivery time for the next day, but some people logging in on Monday or Tuesday were told they would have to wait two days for a delivery, leading to customer service complaints.

The company--which in June agreed to be acquired by another online grocer, Foster City, Calif.-based Webvan Group--delivers to homes in Los Angeles and Orange counties.

A new discount offering first-time shoppers $20 off a $50 order, was heavily advertised over the last month and led to a jump in orders, said Cor Karaffa, HomeGrocer's senior vice president for operations. Those orders filled up the company's delivery schedules at the start of the week, traditionally its busiest period, he said. First-time shoppers accounted for about 45% of orders on Monday and Tuesday, compared with about 20% on average.

He did not specify how many customers were affected by the delay, but said the company would hire more drivers and personal shoppers to deal with the increased orders.

"It's put a little bit of strain on the system," Karaffa said. "We're doing everything we can to fulfill the requests of our customers."

The increased demand could foreshadow higher revenue for the company, but many industry observers remain unconvinced that the online grocery model can succeed.

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