Updated from 12:13 p.m. EDT

Peapod

(PPOD)

, the Internet grocery store giant that has come to symbolize the financial pitfalls of e-commerce, got a new leader Tuesday from a real supermarket company that helped save Peapod from bankruptcy last month.

Marc van Gelder, 38, joined Peapod from

Stop & Shop Supermarket

, a New England-based chain owned by grocer

Royal Ahold

(AHO)

of the Netherlands, where he had served as director of business development. He is the new chief executive and president, taking over for Bill Malloy, 47, who

resigned on March 16 because of health reasons.

Malloy's resignation left Peapod on the brink of bankruptcy, as a consortium of four companies backed out of its $120 million investment, leaving the Skokie, Ill.-based company with only $3 million on hand. Shares of Peapod plummeted 52% that day.

Royal Ahold helped save Peapod on April 14 with a $73 million investment in the form of a newly issued series of convertible preferred Peapod stock at a price of $3.75 a share.

With a chief executive and funding now in place,"the playing field's been leveled," said Ellen Baras, an analyst with

William Blair & Co.

"They're back in the game." She rates Peapod a hold and her firm underwrote the company's initial public offering.

Peapod's strategy has changed too. Originally, Peapod planned to use the $120 million investment to convert to a central warehouse system in all eight of the metropolitan areas where it had a presence. Previously, in some markets, such as Boston, the company had sent employees into actual supermarkets, such as Stop & Shop, to buy products for customers.

However, now with Royal Ahold on board, Peapod is trying to work with downsized warehouses using Royal Ahold's existing, unused space. "They are attempting to use a smaller, less-capital intensive business model with a limited product line," said Barry Stouffer, an analyst at

J.C. Bradford

. "That's the totally opposite direction than others have taken."

For example, Peapod's warehouses will be 8,000 to 10,000 square feet in size, with 7,500 SKUs, or stock keeping units which represent stand-alone items, while a competitor like

HomeGrocer.com

(HOMG)

uses warehouses that are 120,000 square feet in size with 15,000 to 20,000 SKUs.

Stouffer rates Peapod a neutral and his firm has done no underwriting for the company.

Peapod has encountered difficulties competing with its Internet rivals

Webvan

(WBVN)

,

NetGrocer

and HomeGrocer.com, as well as conventional supermarkets such as

Safeway

(SWY)

that are also moving toward the Web.

Shares of Peapod are up 1/16 to 3 1/8. (Peapod closed Tuesday trading down 1/16, or 2%, at 3.)