Unravelling the grocery supply model growth

There’s been a rapid rise in on-demand grocery delivery apps, complete with similarly snappy names and attention-grabbing branding. But can they compete with traditional supermarkets amid the cost of living crisis?

Convenience culture has transformed almost every aspect of consumers’ daily lives over the course of the last decade. For many of us, it’s hard to remember a time before we relied on Uber to get us from A to B; binged a new TV series on any number of available streaming platforms; or had dinner delivered to our door, courtesy of Deliveroo. If the spate of ‘on-demand’ grocery delivery apps that have been popping up over the last couple of years are anything to go by, could our weekly food shop be about to go through a similar revolution?

“In short, yes,” Leo Burnett’s head of strategy, Tom Sussman, tells CR. “As our time has become increasingly valuable, so too has convenience. Advances in logistics and the embracing of zero-hours contracts then just provided the final pieces of the puzzle.” Capitalising on the huge increase in demand for online grocery deliveries during the pandemic, and the struggle for traditional supermarkets to meet the demand, an increasing number of delivery companies operating ‘dark stores’ in cities across the UK sprang up to fill the void.

The premise of most of these apps is simple enough: all your essential groceries, and perhaps a couple of extra treats, are delivered right to your door in less than the time it would take for you to go to your local convenience store or supermarket. Venture capitalists in particular seem to be lapping up the idea, with investors pouring billions of pounds into on-demand grocery delivery firms. The latest figures from the Institute of Grocery Distribution value ‘quick commerce’ at £1.4 billion in the UK alone, and it is predicted that the market will more than double in size to £3.3 billion in the coming years.

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