Look at Grocery Shopping in a Whole New Way

Lately, Grocery-Works. com founder and President Kelby Hagar s smile has been about as big as the gnus on those gigantic green onions gracing the GrocerWorks.com billboard advertisements throughout Dallas.

That’s because his company recently teamed up with Safeway, allowing the online grocery store to expand nationwide-a coup that places it far ahead of its competitors.

GroceryWorks.com will be in six to 10 cities across the U.S. by year’s end. This partnership will allow Safeway and GroceryWorks.com to grow together. although GroceryWorks.com has no trouble growing on its own locally with a weekly 10 percent increase in customer volume. With the recent addition of CEO Gary Fernandes, Hagar predicts nothing but success for the privately held company.

The success isn’t that surprising, considering Hagar had a good idea about how people feel about grocery shopping when he founded GroceryWorks.com over a year ago. Of all the lines he had to wail in to make purchases, the one he couldn’t stand to wait in one more time was a grocery store line. So the Harvard Law School graduate left his law career to join the Internet arena and started an online grocery store. He proved to his big-name venture capitalists that delivery is cheaper than operating a grocery store and that people would welcome never trudging down grocery store aisles for laundry detergent again.

Hagar carefully executed his business plan from the technical infrastructure to the Carroll ton-based warehouse and delivery operations. He created a simple online ordering process where customers could shop the 12,000-plus items (plus Eatzi’s cuisine) in categorized, virtual aisles from the comfort of their own homes. The prices are the same as a grocery store’s, and orders can be delivered on the same day for free.

With the e-commerce industry in full swing, it’s not surprising that other online grocery stores have popped up around town, but Femandes and Hagar aren’t worried about competition.

“We’re different because we don’t have delivery service fees,” says Femandes, a former longtime EDS executive who originally wanted to invest in GroeryWorks.com, but was so impressed with it that he became a partner. “Just the fact that you can place an order in the morning and have it in a matter of hours without leaving your house is something that isn’t being offered by anyone else.” he says. “And, we’re able to keep our prices low and our quality high because of our partnership with Safeway.”

GroceryWorks.com’s numbers are evidence of its success. The web site receives about 25.000 hits weekly and fulfills more than 5,000 orders per week. The number of employees has grown from two to more than 400 in just one year. Despite the success, Hagar and Femandes refuse to be satisfied, always looking for ways to improve.

“I often get up at 1 a.m. and sit up for hours coming up with ways to make GroceryWorks.com even better,” Hagar says. “I love getting emails from people telling us how this site has given them back their time. That’s what it’s for.”


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