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Webvan Cancels Sacramento Service

April 24, 2001

FOSTER CITY, Calif. (AP) _ Online grocer Webvan Group Inc. has canceled its service in Sacramento, in an effort to make its San Francisco Bay area market profitable.

In a letter sent Monday to customers in the Sacramento area, Webvan said its last deliveries there would be made Friday, said Bud Grebey, a company spokesman.

``We have a very loyal customer base,″ he said. ``But the loyal customer base just wasn’t big enough and wasn’t growing at a fast enough clip to support our operations there.″

Sacramento was served by an Oakland-based distribution center. Grebey said the low number of customers in Sacramento could not support the transportation costs from Oakland.

In cutting the Sacramento service, Webvan hopes to make its San Francisco market profitable, something that’s paramount in today’s business climate, Grebey said.

The company has lost $610.8 million since 1998, including $453.3 million last year. In a report filed this month with the Securities and Exchange Commission, Webvan said it needed a substantial infusion of new capital to stay in business past the fourth quarter of this year.

The Sacramento service was launched in June 2000. Grebey declined to say how many customers used the service in Sacramento, but said it had far more customers in Portland, Ore., which has a similar population.

Webvan also delivers in Seattle, Orange County, Los Angeles, San Diego, Atlanta and Chicago.

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