Tesco and Safeway Sets Sail Where Webvan Failed

British supermarket chain Tesco and U.S. chain Safeway are launching an on-line store that will deliver to customers in Portland, Ore., and in Vancouver, Wash., before attempting a broader effort nationwide. The two companies step up to the plate where Webvan struck out, and at a time when the grocery industry has been hit with concerns about a brick-and-mortar price war.

Moderator Comment: Will Tesco’s home delivery system play in Portland?

Tesco’s grocery home delivery program is making money in the U.K. The only major chain that has been able to make that claim.

Safeway’s approach to home delivery has been cautious to date. That approach seems to have served the grocer and its investors well as home delivery programs from the likes of Streamline, HomeGrocer and Webvan have failed.

Another pure-play, Peapod, was also having its problems until Ahold pretty much took over. A number of traditional brick and mortar supermarket operators such as Marsh in Indiana and Bashas’ in Arizona are reported to be making a small profit with programs that include variations of pick-up and delivery options.

Here’s one bet that the Safeway/Tesco partnership is going to get it right, as well. [George Anderson – Moderator]