JERSEY CITY, N.J. — As Wal-Mart Stores Inc.WMT -1.01% prepares to expand its online grocery business, 27-year-old Peapod Inc. is working to shore up customer loyalty and improve fulfillment and operations with technology. That includes what is for Peapod an untried combination of warehouse management software, scanners, robotics and seven miles of conveyor belts.
Peapod does business in 12 states and Washington D.C., but Boston, Chicago and Washington D.C. are its only profitable markets, said Jennifer Carr-Smith, president and general manager of Peapod. Margins are thin in the grocery business, she said, “even thinner in online groceries.”
The pending merger of Peapod parent Ahold NVAH.AE 0.00% with Delhaize Group DELB.BT -0.41% may allow the online grocer to expand to new markets in the southern U.S., where Delhaize operates chains such as Food Lion, Ms. Carr-Smith said. But for now, Peapod sees New York as its next big target.
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