Internet grocer Peapod (Nasdaq: PPOD) and Giant Food Inc., a leading supermarket chain in the mid-Atlantic region of the United States and wholly owned subsidiary of international food provider Royal Ahold (NYSE: AHO), today announced the launch of Peapod by Giant online shopping and delivery service in the Washington, D.C. area. Deliveries begin on Tuesday, Nov. 7.

This is the second market expansion for Peapod since Royal Ahold acquired a majority stake in the Company in the second quarter of 2000. Peapod is working closely with Royal Ahold's supermarket brands to expand along the East Coast, and in June started service in Southern Connecticut. A supply and services agreement between Peapod and Ahold provides Peapod with enhanced purchasing power versus other online grocers.

"The Washington metropolitan area is a market that fits strategically within our expansion plans, as we continue to focus immediate growth along the East Coast where Royal Ahold brands like Giant have a strong presence," said Marc van Gelder, Peapod's president and chief executive officer. "We are very excited to be working with Giant to serve the nation's capital, an area densely populated with lots of busy, online families for whom this service will be a welcome convenience. We expect our business to grow rapidly in this market."

Peapod by Giant grocery orders will be picked, packed and delivered from a centralized fulfillment center in Gaithersburg, Md. In September, Peapod purchased the operating assets of Streamline.com, Inc. in the Washington, D.C., market, acquiring the Gaithersburg facility, an established customer base and existing workforce and management.

"Consumers in the Washington, D.C. area can now take advantage of shopping online and get the same high-quality, in-store freshness that they trust from Giant, delivered right to their door," said Dick Baird, president and chief executive officer of Giant. "It's a welcome option for busy people."

Peapod by Giant will offer a wide variety of Giant and national brands, from fresh produce, cheeses, seafood and meats, to a large selection of baby food, pet food and health and beauty products. Peapod's just-in-time stocking process guarantees customers the freshest products available. Peapod will also deploy its state-of-the-art order fulfillment technology and proprietary transportation routing system, which helps it achieve accuracy and efficiency in picking, packing and delivering grocery orders in its current markets.

Initial delivery service areas including Northwest Washington, D.C., Montgomery County in Maryland and Fairfax County in Virginia. Customers log on to www.giantfood.com to place orders. Customers can choose attended or unattended delivery and can have groceries delivered as soon as the next day. Peapod by Giant customers can also participate in the "A+ BonusBucks" program, which enables shoppers to raise money for the schools of their choice when they shop from Nov. 5, 2000 through March 31, 2001.

Giant Food Inc., headquartered in Landover, Md., operates 176 supermarkets in Virginia, Maryland, Delaware, New Jersey, and Washington, D.C., and employs more than 26,000 associates. Giant is a member of the Ahold USA group, owned by Royal Ahold of the Netherlands. Royal Ahold operates approximately 7,000 supermarkets, hypermarkets and other store formats in the United States, Europe, Latin America and Asia with annualized sales approaching US 50 billion.

Founded in 1989, Chicago-based Peapod, Inc. is a leading Internet grocer, providing consumers with broad product choices and local delivery services. With 1999 sales of $73 million, the Company currently serves more than 120,000 customers in Boston, Southern Connecticut, Long Island, Washington, D.C., Chicago and San Francisco. Peapod also serves customers nationwide through its "Peapod Packages(TM)" service. Peapod is a provider of targeted media and research services to consumer goods companies, offering its unique medium for targeting promotions and advertising at the point of purchase and conducting cost-effective research. Peapod's shares are traded on the Nasdaq under the symbol "PPOD."