LONDON, July 6 (Reuters) - Rapid delivery grocery firms will
only ever account for a small chunk of Britain's overall food
market as the bulk of consumers will always prefer the lower
prices and larger ranges offered by bigger retailers, Ocado
boss Tim Steiner said.
The country's grocery sector faces a new threat from
companies like Weezy, Getir, Dija, and Gorillas who offer an
ultra-fast service, supplying groceries via apps in as little as
15 minutes.
But British online grocer and technology group Ocado said
the new entrants posed much more of a danger to neighbourhood
corner shops than online supermarket sales, such as Ocado's
online-only grocery joint venture with Marks & Spencer.
Traditional online grocery shopping, where people book
delivery slots days in advance would continue to underpin the
market.
"The channel shift is going to move to the big warehouses
because they are the format that offers customers the lowest
price and the largest range, and the freshest food, and
customers have always migrated to those factors," Steiner told
reporters on Tuesday.
Speaking after Ocado reported a 20% rise in first-half
retail revenue, he said there was a market for immediate grocery
delivery, but that market is small, and the market for
deliveries within 15 minutes even smaller.
Ocado is rolling out its Ocado Zoom service which offers
deliveries within an hour, while Sainsbury's "Chop
Chop" service guarantees the delivery of up to 20 items in 60
minutes.
Other supermarkets, including market leader Tesco
and Asda, are also trialing rapid delivery options.
Morrisons, Aldi and Waitrose also use
app Deliveroo as a platform for quick delivery.
Currently online shops account for about 14% of Britain's
overall grocery market. Steiner said short-term needs probably
account for 5% of that overall market and he suggested
ultra-fast delivery could address 14% of that 5% short-term
segment.
The more immediate the delivery, the more expensive the
service and the narrower the range of products, he said, adding
that people might be willing to spend a bit more on the
occasional immediate top-up but that is as far as it will go.
He also noted that the rapid delivery sector would only ever
be able to serve densely-populated urban areas.
(Reporting by Sarah Young; Editing by Emelia Sithole-Matarise)