How disruptive is the fast grocery delivery model? – RetailWire


October 29, 2021

According to a recent Pitney Bowes BOX poll investigation, 54% of American consumers think that hourly grocery delivery is important to them, well above other categories. This is good news for the wide range of newcomer “super-fast” and “fast” delivery entering the market.

Participants promise delivery in as little as 10 or 15 minutes and their expansion has been fueled by significant venture capital funding over the past year. Players include Gopuff, who recently got a valuation of $ 15 billion in a funding round, as well as Getir, Gorillas, Fridge No More, Buyk and Jokr.

Similar to ghost kitchens in the restaurant space, fast delivery companies operate from dark stores or micro-warehouses where preparers and packers efficiently prepare orders for delivery. The savings from buying directly and avoiding the need for cashiers and spacious aisles helps keep prices competitive with local grocers. Departments can also set up dark stores in lower rent locations.

On his website, Fridge No More says, “No extra cost for added convenience. How are the prices so good? Smaller stores = lower rent.

Gopuff Also earns money from advertising and a shipping fee of $ 1.95 per order with a minimum order of $ 10.95 while offering a monthly subscription of $ 5.95. Many services, however, do not charge a delivery fee or require minimum orders or subscriptions.

Critics see fast grocery delivery companies facing challenges when it comes to overcoming the scale of large incumbent grocers.

“It’s a useful service that will grow quickly,” said Jat Sahi, head of retail consulting at Fujitsu. CNBC. “But how to differentiate one from the other? If you can’t differentiate yourself, you’ll never make a lot of margin or profit.

Others expect rising expectations for prompt delivery to lead to potential acquisitions in the space by like Amazon.com, Instacart and Doordash as well as partnerships, such as Kroger’s recent Instacart agreement to offer 30-minute delivery to its customers.

Earlier this week, Uber in partnership with a French fast delivery startup to support the delivery of shopping in 15 minutes from Carrefour after a partnership with Gopuff Earlier This Year On Faster Delivery Of “Everyday Essentials” To The United States

Alina Pedraza, area manager for Buyk in Manhattan, said CNBC, “The most important thing we give people is time.”

DISCUSSION QUESTIONS: How much will fast food disrupt the grocery store channel? How should traditional grocers as well as more established delivery platforms react?

Braintrust

“Fast food shopping is something all grocers should consider if they are to stay competitive. “

“The speculators are starting again. How many traditional grocers are valued at $ 15 billion, let alone the scale of this business today? This is madness.

“It’s very disruptive, but mostly in a bad way. For the most part, shopping for groceries is an exercise in setting a big pile of money on fire.”

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