Acquisitions of ultra-fast grocery stores continue | PYMNTS.com
Because reaching scale is the superfast grocers’ only hope of making the model work, the number of players currently moving into space across the world is unsustainable, and there has already been significant consolidation in this young category.
This week, for example, media reported that German fast-commerce startup Gorillas had finalized its first acquisition deal for French delivery startup Frichti on undisclosed terms.
More details: Gorillas finalizes M&A deal for French start-up Frichti
“We just want to do something where we can also leverage the know-how for ourselves – not just a few warehouses with extra cash burn,” Gorillas CFO Elmar Broscheit said of the strategy. of the company’s merger and acquisition in an interview with the German Boersen-Zeitung. , reported Bloomberg.
In 2021, on-demand essentials and food delivery service Gopuff acquired UK-based on-demand delivery startups Dija and Fancy. Additionally, Turkish 10-minute grocery delivery startup Getir agreed to acquire British rival Weezy, and on New Year’s Eve German food delivery giant Delivery Hero announced an acquisition deal for becoming the majority shareholder of Barcelona-based fast-commerce startup Glovo.
Read also: European giants consolidate in a competitive ultra-fast delivery space
A January report found that losses from on-demand delivery services can reach up to $20 per order on average.
Related: Superfast Grocers’ Losses Mount Amid Uncertain Future
What insiders are saying
Superfast grocers expect to see more consolidation in the future.
“I think as super-fast groceries start to mature, we’ll see some disruption,” said James Walker, CEO of super-fast delivery service Buyk (currently on furlough as the company faces the fallout from sanctions against Russia) told PYMNTS in an interview in January. “Players who are very focused on the business model as well as the customer experience will ultimately succeed, and those who don’t spend the required time won’t be as successful.”
Read more: Superfast grocery delivery moves to the Midwest as competition intensifies
Those in other eGrocery categories question the long-term feasibility of the ultra-fast model.
“It’s definitely structurally better if your article arrives in an hour than if it arrives in a week or more, because you don’t have to plan that far in advance,” said Alex Weinstein, digital director of online grocer Hungryroot at PYMNTS in January. “However, at a certain point, marginal returns decline.”
See also: eGrocery customers expect more than digital shelves; They expect personal relationships
A study by PYMNTS’ The 2022 Global Digital Shopping Index: The Digital Transformation of Retail and the Consumer Shopping Experience, created in collaboration with Cybersource, which surveyed 13,000 consumers and 3,100 merchants in six countries, found that the use by consumers of mobile native shopping channels in these countries grew by 21% between 2020 and 2021.
Find out more: a study in six countries confirms that the mobile phone is a must in modern shopping
However, adoption of grocery delivery channels can vary significantly across international markets. For example, findings from the What UK Consumers Expect From Their Grocery Shopping Experiences study, a collaboration between PYMNTS and ACI Worldwide, which surveyed over 2,500 UK consumers about their grocery shopping habits in September 2021, reveal that UK shoppers are more than three times more likely than their US counterparts to favor online shopping and home delivery. Specifically, 26% of UK grocery shoppers rank the channel as their favorite, compared to just 8% of US shoppers.
Related News: 52% of UK consumers shop online more than they did in 2020