November 14, 2000 1:00 PM PST

Regional Net grocer shuts down abruptly

Another Web grocer has checked out.

ShopLink.com, a regional online store that served New York and three New England states, posted a message on the site's front door Tuesday notifying customers that the Westwood, Mass., company has ceased operations.

"We would like to apologize for the abrupt nature of the cancellation of our service to you," the message on the site read.

Calls to ShopLink's headquarters were met by a recorded message confirming the company's immediate shutdown.

These are hard times for online grocers--especially for those based in Westwood, Mass. On Monday, Westwood, Mass.-based Streamline.com, one of the East Coast's largest Internet grocers, announced it would close its doors next week.

But regardless of region, all of the online supermarkets are battling to attract the kind of consumer demand they had envisioned only two years ago when they were part of one of the hottest segments of e-commerce.

Research groups predicted the category would earn billions. But those bloated expectations have been deflated, the result of soft consumer demand and investor apathy.

Webvan, the market's largest player, gobbled up its next-largest competitor, HomeGrocer, this summer. Foster City, Calif.-based Webvan, however, has missed earnings projections two quarters in a row. The company is under pressure to turn a profit in at least one of the 10 cities it operates in.

Skokie, Ill.-based Peapod narrowly missed having to close its doors earlier this year as Dutch grocery powerhouse Royal Ahold acquired the company and bailed it out.

With a new cash infusion, Peapod bought Streamline's operations in Washington, D.C., and Chicago two months ago. Since then, Streamline has seen a prolonged descent in business, analysts said.

Besides delivering groceries in states including Massachusetts, Rhode Island and Connecticut, ShopLink offered shoe repair, dry cleaning, leather repair and film-processing services. The company contracted with several different businesses to handle the services.

"We were kind of prepared for it," said William LaRossa, owner of LaRossa Shoe in South Weymouth, Mass., one of the companies ShopLink contracted with. "The last couple of months, doing business with them went at a snail's pace. "A key executive left a couple of months ago, so we saw that as a bad sign."

 

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