Online Delivery Service Giving Big Guys a Run for Their Money

Even as online grocer Webvan Group Inc. plans to invade the Southland with its purchase of HomeGrocer.com Inc., Orange County’s own home-grown delivery service, WhyRunOut.com, is plotting its own expansion, tied to a partnership with Stater Bros. Markets.

WhyRunOut.com said Wednesday it will extend its service to parts of northern San Diego County early next month, shuttling groceries from Stater Bros. stores in Encinitas and Poway to residents in the surrounding communities. The Colton-based bricks-and-mortar grocer and the Aliso Viejo-based online delivery service announced in April that they were teaming up to provide delivery service to south Orange County residents.

The partnership allows customers in designated areas to place online orders for any products in Stater Bros. markets. Orders placed by noon are delivered the same day. Stater Bros. pays WhyRunOut.com an undisclosed fee to make the deliveries; customers pay the same prices they would in the stores, plus a $4.99 delivery fee.

If the union is fruitful, the companies plan to expand the grocery delivery service throughout Southern California, where Stater Bros. has 155 stores.

As it does in South County, WhyRunOut.com will partner with other local retailers in San Diego County to deliver dry cleaning, film processing, movie rentals and other goods.

The announcement of the expanded service comes just two days after Foster City-based Webvan said it will buy HomeGrocer.com in a $1.2-billion stock deal. HomeGrocer’s delivery trucks, with their eye-catching peach logos, rolled into Orange County last year and the Kirkland, Wash.-based company has since expanded to Los Angeles and San Diego counties.

But WhyRunOut’s chief executive, Dan Frahm, doesn’t sound troubled by the beefy competition encircling him. He says his business model is more likely to please customers, partly because most of HomeGrocer and Webvan’s deliveries aren’t made until the day after the order is placed.

“You don’t want to have your life revolving around groceries,” he said Wednesday. “You want to wake up in the morning, find out that you’re out of orange juice and have somebody bring it to you that night.”

And if you want orange juice that morning?

“We can’t help you if you run out of it that morning,” he said.