Deliveroo has opened its first delivery-only ‘dark’ grocery store in partnership with Morrisons for a new service called ‘Hop’. It will initially be available to residents around Vauxhall and Battersea in London, offering delivery in as little as 10 minutes.
The rapid delivery service aims to complement Deliveroo’s existing on-demand grocery offer, which now delivers from around 4,600 grocery stores around the UK following strong growth during the pandemic. The firm also already has more than 250 delivery-only kitchens globally for its restaurant food service.
The move comes as Deliveroo faces increasing competition from the new breed of rapid grocery delivery start-ups, including Getir, Jiffy, Gorillas and Zapp, which have proliferated across the UK this year after raising hundreds of millions of pounds in venture capital.
Deliveroo Hop will offer a range of up to 2,000 items, sourced from Morrisons’ wholesale operation. This will include branded and own-label products, such as Morrisons ‘The Best’ range which includes wines, ready meals and snacks, as well as meat and fish from its Market Street counters.
The company highlighted that Hop’s dedicated dark store will give companies greater visibility into stock levels compared to picking goods from traditional supermarkets used by consumers. Deliveroo hopes that this will make for a more reliable service with fewer missed or substituted items in each delivery, as well as arriving faster than its current 20 to 30-minute service.
Will Shu, CEO and Founder, Deliveroo said: “Deliveroo Hop will enhance our on-demand grocery offering for both consumers and our grocery partners. We are pleased to launch the service with Morrisons, one of our largest partners.”
David Potts, Chief Executive of the supermarket group, added: “Morrisons has enjoyed a strong and growing partnership with Deliveroo since March 2020 which now covers more than 320 stores.
“The rapid delivery grocery sector is developing quickly and is highly valued by customers. The launch of Deliveroo Hop represents another key moment, enabling customers to choose from a wide selection of groceries from Morrisons and have them delivered by Deliveroo in as little as ten minutes.”
Deliveroo expects to expand the Hop service to more locations soon, potentially working with its other supermarket partners that include Waitrose, Sainsbury’s, and Aldi.
Florence Wright, Senior Analyst at Edge by Ascential, commented: “This partnership shows how rapid delivery is becoming table stakes for grocery businesses in major markets even though this sector didn’t really exist at the start of the year. Nine months later, this is a multibillion-dollar industry that has already been the focus of takeover activity and strategic investments.
“An important measure of sustainable success in this sector is scale and Deliveroo has that – compared to its smaller rivals. Deliveroo is already a heavyweight in the on-demand delivery market, and its proposition is further strengthened by its long-term partnership with Morrisons. It’s also important to note that Amazon owns an 11.5% share in Deliveroo and are building a relationship with them giving prime members free Deliveroo Plus. It’s, therefore, no surprise that it’s partnered with Morrisons with its first foray into rapid delivery as it has a standing partnership with the supermarket where it sells Morrisons products on its site. The use of dark stores will also enable them to compete with even quicker timeframes. It is therefore set to make waves.”
NAM Implications:
- ‘Offering delivery in as little as 10 minutes’
- A competitive edge?
- Reaching a point where delivery is faster than personal shopping trips?
- Watch this space!
