The No. 3 grocery chain's plans involve an electronic "tablet" that would enable consumers to upload orders directly to Safeway and have groceries delivered to their door. Safeway is in talks with United Parcel Service of America and Hewlett-Packard Co. to provide home delivery and the electronic tablet, respectively, according to executives familiar with the plan.
"The idea is that consumers could be in their kitchens and write a grocery list on the tablet that would automatically be connected to Safeway through a broadband upload," one of the executives said. The tablet would have a wireless connection to a set-top box or a cable modem.
Gary Smith, senior VP-Internet strategies for Pleasanton, Calif.-based Safeway, declined comment.
Judy Heady, senior VP-media services for AT&T Broadband, could not be reached.
There are various Safeway-owned stores in areas where AT&T has a major cable presence, including northern California, Chicago and Houston.
Safeway would likely first roll out the service in northern California if it can come to terms with AT&T, the executives said, noting that Safeway's corporate headquarters is in that region.
Home delivery of groceries is a category that's been heating up. At one point, customers in Safeway's stores in California were urged to use Internet home-shopping pioneer Peapod (peapod.com) if they were interested in such a service.
The Bay area is also served by Internet home-shopper start-up Webvan Group (webvan.com).
FIRST TARGET: BAY AREA
"I think the presence of Webvan in the Bay area is why Safeway wants to roll this out as soon as possible," one of the executives said.
Safeway, which has an extensive database about its customers' shopping habits through customers' use of discount cards, would likely not charge for home delivery, the executive added. Web-van charges a delivery fee of $4.95 for orders under $50; delivery is free for orders more than $50.
"Clearly, this could be a very powerful application of interactive services," said one of the executives. "I think one of the big issues for AT&T is will the damn thing work? I don't think any cable operator wants to be in the position where they're getting blamed because someone doesn't get their groceries."
A wireless broadband connection into the kitchen was also an idea demonstrated at the Western Cable Show in Los Angeles in December.
El Dorado Hills, Calif.-based ShareWave demonstrated a refrigerator that included a computer screen on the outside of the freezer door.
"People are always congregating in their kitchen," said Don Apruzzese, ShareWave's director of business development.
"They might use a screen on a refrigerator to watch streaming video of a show on Food TV, for example."
Mr. Ross is editor of Electronic Media