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Longo's to Expand Internet Operations by Acquiring Grocery Gateway

TORONTO - Longo Brothers Fruit Markets, Inc. (Longo's), an Ontario, Canada-based family-run independent grocer, has taken over operations of online grocer Grocery Gateway, Inc., and plans to acquire its retail grocery business.

"Grocery Gateway is a natural fit with Longo’s business," Longo's president and c.e.o. Anthony Longo told Progressive Grocer. "We’ve had a relationship with them since they launched, and they've built an excellent brand and a great reputation for customer service over the past five years. In Longo's strategic plan for this year, we had made a commitment to extend our online business. Buying Grocery Gateway's operations speeds up our plans and allows us to bring the Longo's hallmarks of quality, freshness, service, and value to many more customers."

Known for the quality and freshness of the company's perishables, Longo's is also known as a pioneer in innovative customer service models. In 1999, through the company's founding partnership with Grocery Gateway, Inc., Longo's became the first grocer in Ontario to provide groceries to customers who chose to shop online. "When Grocery Gateway started, they needed somewhere to source their fruit, vegetables, and other goods," recounted Longo. "For the first couple of years, all their customer orders were picked directly out of our Longo's stores. When they moved to a centralized distribution model, this arrangement ended, but we kept in touch. I think their customers will be thrilled to know that we will once more be offering Longo's own brand products and our famous fresh foods delivered direct to their doors."

Longo's vision is to continue to enhance the customer experience –- regardless of whether this is accomplished in the store or online. A key initiative in its strategic plan for 2004 was the expansion of the business by enabling customers to shop online directly with Longo's. The acquisition of Grocery Gateway's business accelerates these plans. "Our long-term goal is to increase capacity and levels of service throughout the entire Grocery Gateway network," said Longo. "We want to bring Longo's traditional values to many new customers and grow a viable new line of business for the future.

"This fits with our overall go-to-market strategy –- to exceed our customers' expectations at all times, but never get too far from the core values of personal, family-run service that are the backbone of our company," he added. "Back in 1956, when the first Longo's opened in Toronto, our founders, my father, Tom, and uncles Gus and Joe, would make deliveries from phone orders every day –- delivering the freshest fruit, vegetables, and other essentials to local customers in the surrounding area. This was a great help to people who were housebound, or unable to get to the store for whatever reason. The Grocery Gateway deal is really just a 21st century extension of our 1956 delivery service –- except that now we'll be serving a much wider area than the few streets our founders were able to cover."

Founded in 1998, Grocery Gateway grew rapidly, providing online ordering and convenient delivery service, to become the leading online retailer in the greater Toronto area. Although it had a successful track record, the company determined that long-term stability could only be achieved as part of an established offline grocer. Longo's quickly emerged as an ideal new owner of the business, given the established relationship and clear synergies between the two companies.

Under the terms of this transaction, Longo's will take over Grocery Gateway's operations immediately, and is expected to acquire the company's retail grocery business within the next 60 days.

-- Joe Tarnowski
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