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Peapod, Inc. Revenues Up 104% for the Year

Online grocer Peapod Inc. posted a 90% revenue increase for the fourth quarter, to $18.0 million from $9.5 million a year ago.

Fourth quarter net loss was $4.2 million versus a loss of $3.4 million for the same quarter in 1996.

Revenues for the year ended Dec. 31, 1997 were $59.6 million, up 104% from $29.2 million in 1996. The company reported a net loss for the year of $13.0 million, or $0.86 per share, compared with a loss of $9.6 million, or $0.75 per share for 1996.

Peapod said that in 1997, grocery sales increased 98% to $43.5 million from $22.0 million a year ago. Member and retailer services revenues increased 128% to $13.9 million from $6.1 million. Revenues from the sale of interactive marketing services grew 108% to $2.2 million from $1.1 million.

Membership during the past year jumped 115% from 33,300 to 71,500 members. Orders during the year were 396,600, up 97% from 201,100 orders fulfilled last year.

The company said its net loss for the year resulted from its continuing investment in new markets and member acquisition programs. Grocery operations expense increased 115% to $17.5 million from $8.1 million to support the addition of operations in four new markets. Other expense items grew during 1997 at rates substantially lower than revenues, the company said. Total costs and expenses, exclusive of the cost of groceries sold and grocery operations expense, increased by 50%.

Andrew B. Parkinson, chairman, president and chief executive officer, said in a statement: "Our dramatic growth in membership, orders and revenues showed a consistently increasing consumer demand for our service. We also made positive progress in streamlining our operations, and gained economies of scale in many overhead categories. We are further encouraged by the early consumer receptivity to our next generation of online shopping software, version 5.0, which went into beta testing during the fourth quarter."

Parkinson said that this year, the company will focus on centralizing operations in select major cities and completing technology solutions, such as version 5.0 and our new hand-held scanner picking system, that will improve service quality and reduce costs. There was no word on when the company expects to reach profitability, however.

Peapod said it currently provides grocery services in seven metropolitan markets in the United States and serves over 70,000 members.