New franchise-based online grocer to compete with Grocery Gate way

TeleGrocer Inc., which launched operations in Ottawa in 1996, began quietly offering its services in Toronto on Feb. 1 and plans to expand gradually into the outlying regions, says Garfield Coore, chairman and chief executive officer.

The Toronto Star
February 7, 2002

New franchise-based online grocer to compete with Grocery Gate way
Dana Flavelle

A small franchise-based Internet grocer has moved into the Toronto area, looking to carve out a niche in a market currently dominated by Grocery Gateway Inc.

TeleGrocer Inc., which launched operations in Ottawa in 1996, began quietly offering its services in Toronto on Feb. 1 and plans to expand gradually into the outlying regions, says Garfield Coore, chairman and chief executive officer.

Coore says TeleGrocer can compete with larger, better financed competitors, like Grocery Gateway, because it operates on a different business model.

For example, it doesn't own its own warehouse or buy items directly from wholesalers. Instead, it partners with existing grocery retailers. In Toronto, for example, it has signed on with the Number 2 supermarket chain, Sobeys Inc., which operates Sobeys and IGA stores.

"We don't compete with or replace the supermarket," Coore explained in a telephone interview yesterday. "We're not in the grocery business. We're in the grocery shopping and delivery business."

Orders taken over the Internet or the telephone are filled at a local retail stores within 20 minutes drive of the customer. The picking and packing and delivery of the groceries is done by TeleGrocer franchisees, who earn about $20,000 to $30,000 a year, he said.

"It's a great second income for someone who wants to work part-time," he said.

Customers are charged regular retail store prices, including any in-store discounts or specials being offered, plus $9.95 for delivery and a 5 per cent shopping fee, he said.

The company also offers a delivery-only service for customers who want to do their own picking and packing, he says.

"It's very popular in Ottawa, especially with older people."

The company maintains a database of 14,000 items, he said.

TeleGrocer is entering the Toronto market at a time when Grocery Gateway has been aggressively trying to boost its business through a marketing campaign that offers 1950s prices on staples like milk, butter and eggs.


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