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Peapod Expanding Into New York City Area

Peapod Inc. said it will begin to offer its Internet supermarket and home delivery service in the New York City metropolitan area beginning in the fourth quarter of 1998.

Peapod will initially service households in Long Island, where it will conduct shopping and delivery operations from a dedicated warehouse facility. In early 1999, the company plans to expand service to northern New Jersey with a second warehouse, and hopes to launch in New York City, Westchester County and Connecticut in the future.

Peapod said it entered into an agreement with Giant Food Stores Inc. and its affiliate Edward's Food Stores in which Peapod will offer products supplied exclusively by Giant/ Edward's, with both companies participating in the marketing of Peapod's service.

Additionally, Giant/Edward's will provide warehouse facilities and certain product procurement and inventory management services. Peapod said it also has an option to expand its relationship with Giant Food Stores into the Philadelphia and Baltimore/Washington, D.C. markets. Financial arrangements were not disclosed.

"New York City is the largest U.S. market by population, with consumer demographics and Internet usage patterns that are very attractive for our service," said Andrew B. Parkinson, Peapod's chairman, president and CEO. "As we expand our coverage of the metropolitan area, we believe the market will provide significant growth for Peapod, both in terms of sales and new members."

The company currently serves seven other metropolitan markets in the United States and has about 103,000 members.