New research from digital and data experts TWC has revealed that half of consumers find the idea of delivery of groceries in half an hour – or less – appealing, delegates heard at FWD Live!, the Federation of Wholesale Distributors conference. Interest was highest amongst those living in London and younger consumers.
Sarah Coleman, Director of Communications at TWC, presented at the conference on the topic of rapid delivery ahead of a panel with representatives from AF Blakemore, Millennium Group and Snappy Shopper.
The TWC Trends research was conducted in June 2022 and showed that 51% of consumers found the idea of rapid grocery delivery appealing, rising to 69% of those living in London. This over-index coincides with the greater presence of the quick commerce tech start-ups such as Gorillas, Getir, GoPuff and Zapp, but also relates to the demographic make-up of the capital, for example London has the highest proportion of people working, who are more likely to need rapid delivery solutions.
Awareness of the individual operators was highest for Getir and Gorillas at 17% (total GB). Within London, Gorillas was best known (46% awareness), followed by Getir at 41%.
The primary reasons consumers cited for using rapid delivery firms were that the shops are too far away (42% agreement); the shops are closed (35%); not having to wait long for delivery (35%); and bad weather preventing me from leaving the house (28%).
Consumers reported typical spends of over £20 on each occasion, with over half exceeding this level of spend. This is over double the typical in-store convenience basket and reflects the willingness to pay a premium for the convenience of delivery as well as the premium selection of goods on offer via some of the apps, including fine wines and electronics.
Cost is a major barrier for non-users. And this will only intensify with the cost-of-living crisis. Over half of GB consumers are having to reduce their spending to pay their bills.
Rapid delivery remains a city-based model, even in high density areas many operators are struggling to find a path to profitability and consequently we are seeing consolidation amongst operators as well as players exiting markets, scaling back expansion plans and reducing headcount.
Sarah Coleman comments: “We are seeing really high levels of consumer interest in rapid delivery of grocery and there is strong evidence that these services attract a different consumer to traditional convenience stores, as well as driving bigger baskets.”
“That said, these services boomed during the pandemic when demand was incredibly high, with many people isolating and lots of shops and services unable to open. Now the world is opening up again, plus the macro-economic climate is challenging, which means investors in rapid delivery are looking for sustainable, long-term business models and consequently we are seeing consolidation and scaling back of some operations.”
The TWC Trends Summer Edition 2022 series is based on the views and sentiments of over 1,000 consumers across the UK. The research was conducted 14-18 June 2022.
Elsewhere at the conference, John Kinney, Managing Director of Unitas Wholesale, said the introduction of the deposit return scheme in Scotland will be an “absolute shambles. It favours out of town supermarkets.”
Dawood Pervez, Managing Director of Bestway, agreed with him, saying: “In Europe DRS was municipal led. In Scotland it is being led by big business.”
But Kinney ended the wholesale leaders panel on a positive note, saying: “Keep talking to us. Wholesale is challenging but this is the channel to be in.”
Other panel sessions included Creating a sustainable supply chain with Pete Statham of Brakes, Colin Smith of the Scottish Wholesale Association, Mark Chapman of Zero Carbon Forum and Nic Storey of PepsiCo.
Kathryn Jones of Castell Howell, Chris Gallacher of United Wholesale Scotland and Cathal Geoghan of Henderson Foodservice took part in the panel Devolved wholesale – challenges and opportunities across the UK.
Kat Cowan of American Express, Gurms Athwal of Parfetts, Tom Gittins of Confex and Philip de Ternant spoke on the panel Cash, credit and the cost of living crisis.
Sheila Gallagher, Commercial Director of Booker, gave an update on the group’s progress, young people took part in a future leaders forum and there were filmed contributions from various wholesalers.
Comments are closed.