U.S. Foodservice to unveil Internet sales operation


November 09, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

U.S. Foodservice Inc., the Columbia-based institutional food supplier, is expected to announce today a Web site that will handle orders from hotels, restaurants and other business customers who need kitchenware and gourmet food items.

The company joins a growing list of corporations that are turning to the Internet to streamline sales and distribution, manage inventory and trim operating costs.

U.S. Foodservice, which earned $83 million on $6.2 billion in sales in its last fiscal year, initially plans to offer 5,000 items on its Next Day Gourmet Web site.

The company will initially focus on getting its 130,000 institutional customers nationwide using its Internet site.

James Miller, U.S. Foodservice's chief executive officer, said in a statement that the company hopes to "improve service, increase efficiency and productivity, and expand into new markets for our equipment and supply and gourmet food businesses."

He was not available yesterday to answer questions. Miller is expected to disclose specifics of the company's electronic commerce strategy today after ringing the opening bell at the New York Stock Exchange as part of a daylong marketing splash in New York.

Michael Martin, an online sales analyst with the New York-based research firm eMarketer, said business customers may find Internet ordering an attractive feature, but that the company will have to compete on price and service.

"Businesses tend to take a broader view of price and service than the general consumer," said Martin.

Items offered on the NextDayGourmet.com Web site will range from baking supplies and specialty gourmet food items to cutlery, pots and pans and other kitchen utensils.

U.S. Foodservice hopes to get a leg up on its competitors by offering next-day delivery.

General consumers also will be able to make purchases through the site.

Online food and grocery sales are expected to surge over the next several years.

eMarketer, a New York-based Internet research company, says such sales could become second only to travel-related spending for Web sales transactions.

The research group predicts sales will top $7.7 billion by 2002.

Much of those sales will come from consumers shopping on sites such as HomeGrocer.com, WebVan.com, and Tavolo.com, formerly known as DigitalChef.com.

Shares of U.S. Foodservice gained $1.50 yesterday to close at $19.1875.

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