Woolworths has acquired a 26 per cent stake in online grocery store GreenGrocer.com.au.
The $12 million investment will be used to expand GreenGrocer's product range, which now covers fruit and vegetables and perishable goods including bread, seafood, meats and prepared food.
The company plans to expand into a specialised range of grocery products, with availability slated for the second half of 2001.
"Customers will soon be able to do selected grocery shopping with GreenGrocer.com.au and we are anticipating a good increase in customer basket size," said Douglas Carlson, CEO of GreenGrocer.
For Woolworths, the partnership strengthens the supermarket's online initiatives which to date have been limited to a shopping trial, Homeshop, in Sydney and Canberra only. Under the deal, Woolworths becomes GreenGrocer's largest shareholder.
"Woolworths' board and management realised that the strong niche market position which GreenGrocer has gained through Doug and Barry (McDonald) and their team represented a unique opportunity for Woolworths to create the culture we need to make Woolworths a B2C Internet leader in Australia in the future, whatever size that Internet market may eventually be," said Bill Wavish, Woolworths' chief financial officer.
GreenGrocer is believed to have around 60,000 customers in metropolitan Sydney and Melbourne and is expected to be profitable by the end of next year.