Sainsbury’s is hoping to grab a slice of the fast-growing food delivery market by teaming up with Deliveroo to bring freshly baked pizzas straight from its in-store food counters to customers’ homes.
The service has launched today in five of its stores – Cambridge, Selly Oak, West Hove, Pimlico and Hornsey – with Sainsbury’s saying the pilot is part of its drive to develop and implement digital technologies to “improve customer experience and make sure they can shop quickly and conveniently whenever, wherever and however they want”.
The trial will last for two months with Deliveroo customers near the stores now able to find Sainsbury’s listed alongside local restaurants delivering in their area.
Customers can choose from nearly 50 Sainsbury’s products on Deliveroo. In addition to a range of pizzas, they can also order from a selection complementary products from the supermarket, including sweet and savoury snacks, sides, salads and dips as well as soft drinks. It is planning to add a wider range of products to the offer during the trial.
Clodagh Moriarty, Sainsbury’s Group Chief Digital Officer said: “With more and more shoppers looking for convenient and affordable meals delivered to their doors, our trial with Deliveroo brings our great value hot food direct to customers’ homes.
“We’re committed to making it as quick and easy as possible for our customers to shop with us and we’ll be listening to their feedback throughout the trial to understand how we can best serve their hot food delivery needs.”
The UK’s food delivery market is already worth £8.1bn, up 13.4% since 2017 and is expected to grow to £9.8bn by 2021 (Source: MCA).
Asda began working with Just Eat last year to trial a pizza delivery service. The chain recently stated that this had proved a “huge success” and would be rolled out to up to 50 stores by the end of the year.
Commenting on the Sainsbury’s move, Thomas Brereton, Retail Analyst for GlobalData, said: “A growing list of retailers have been forging alliances with foodservice delivery companies. For grocers, there are two short-term benefits: it enables a small but immediate foothold in the growing on-demand foodservice industry and it paves the way for potential expansion beyond foodservice to full food and grocery fulfilment (for small basket sizes).
“However, ceding control over the last-mile has its complications. Customer care sits at the core of Sainsbury’s business strategy, but this partnership puts the most customer-facing side of delivery in the hands of an external organization.
“Moreover, e-commerce giant Amazon recently invested £460m in Deliveroo, and if the deal progresses, it may cause a problematic scenario Sainsbury’s in which it is over-reliant on a competitor. If Amazon decides to significantly increase its presence in the UK food and grocery market, supermarket partnerships with certain foodservice operators are likely to be reviewed and possibly removed.”
NAM Implications:
- Truly incremental turnover…
- Increasing productivity per outlet…
- …whilst outsourcing fulfilment.
- A no-brainer pointer for Tesco and Morrisons?
