Online Grocery Retailing in the EU 2014

Online Grocery Retailing In The EU 2014

Release date: October 29th, 2013 (146 pages)
PDF/Powerpoint format. Price: GBP1,999.00


If you studied a map chronicling the evolution of online grocery, you’d see the first fledgling beginnings of the sector with some pioneers on the frontier adopting a pick in store model with catchment areas around single stores in high density conurbations with strong purchasing power and high internet penetration.
Moving onward, slowly but steadily as the territory becomes more open, the business developments become more settled and the model evolves towards semi automated dark stores, dedicated to the sector and new logistics set ups, as explosive growth rates start to put too much strain on the humble structure put in place by the pioneer spirit. It’s at this stage where the first and best players report profitability, as they reach scale effects that make their operations efficient - from picking to truck utilisation to route optimisation
As the broadband revolution gives way to the mobile internet, online grocery enters a third distinct stage in its evolution with the advancement of click & collect, drive solutions and lockers firstly offered by the multi channel players in an elegant way to make their store footprints and property assets count, then in high footfall locations, such as airports and train stations, before an outsider from the West arrives on the scene that transforms the sector yet again...
Going forward online grocery will ask for yet another different logistics set up and we have mapped 4 innovative and collaborative solutions for the sector for multichannel players and pure plays alike to explore.

The drive is a specific French innovation to get around the onerous process of obtaining trading permits in the country. Obstacles in planning and zoning law have been a major reason behind the investment poured into “le drive”, as it is virtually impossible to open new hypermarkets in France (loi Raffarin) and various possible sites are not licensed for grocery trading.
Opening a warehouse in an industrial area, a dark store not classified as a food store and hence easy to register and getting trading permits for, and then to operate it as a click & collect grocery store is an enticing growth lever a retailer can pull in the market, where most other space based expansion is virtually impossible (c-stores and discount being an exception).
The best performing drive in southern France made sales of €44m in 2012, however in France, the birthplace of the concept, the party is now over, as the loi Duflot has put a real dampener on innovation that has spread like wildfire through the country.
Nevertheless Click & collect and stand alone drive stations are an extremely important topic in EU online grocery right now. Retailers innovate in this area, as offering a mix of delivery solutions such as click & collect and drives reduces significant costs of home delivery, raises the overall basket sizes (by up to 75% for Ahold for example), enhances loyalty of core shoppers and of course to gain shoppers from rival retailers that do not offer the service.
From a shopper perspective drives offer a clear convenience benefit of not having to wait at home for a delivery and a cost benefit, as pick up is often free or much cheaper than home delivery. The click & collect and drive stations remove a barrier to online grocery shopping and the pick up option frees up time otherwise spent in the store (in the EU typically around 1 hour for a family sized basket).
This time freed up through a drive or click & collect option suddenly offers new merchandising and marketing opportunities. Now the shopper, after having done the chores, will have enough time to take in many of the promotional materials and offers manufacturers will put into the stores to educate shoppers about the benefits of their products.
Across the EU, basket sizes at drives are much higher than in store, but lower than for home delivery and they are under-indexing on fresh produce (meat, dairy and fruit and veg), but the first retailers are already innovating around this and driving the fresh spend back up. Looking ahead, extrapolating from current rapid growth, the share drives and click & collect takes of the total online grocery spend could reach about 50% in the not too distant future, in France it is already above 80%.
The insights in our latest report are about understanding the opportunities for click & collect and drives and delves deep into questions around the different business models.

Table of contents

Executive summary p10
Context – EU Grocery Retailing in 2012/3 p18
Grocery sizes: EU 27, 2009-2013 in €m p19
Grocery sizes: shoppers cut back, shop around, trade down and go to hard discounters p20
Grocery sizes: EU 27, 2009-2013 growth in %, CAGR p21
Grocery growth rates: EU 27 2009-13 in %, growth in the UK, decline in Greece p22
Grocery sizes: The leading countries, Top 3 take one of every €2 spent p23
Grocery per capita sizes: EU 27 in 2013 in €, from the UK to Bulgaria p24
EU Grocery Retailing in 2013 – Online sizes p25
Online grocery sizes sizes: EU 27, 2009-2013 in €m e p26
Online grocery sizes: the transformation of the sector p27
Online percentage share of total grocery: EU 27, UK, France, Benelux and Scandinavia p28
Online grocery: Scandinavia a hotbed of development, tough German market p29
Online grocery: CEE the opportunity, driven by Auchan, Tesco et al p30
Online grocery: CEE the opportunity, Carrefour p31
Forecast for EU online grocery p32
Online grocery: EU Growth rates and forecast to 2017, when will AMZN Fresh arrive? p33
Forecast 2009-2017: data EU Online grocery in €m, sizes to more than double p34
Online grocery in France: the invention and innovation of le drive p35
Drives in France: more than 2,000 outlets in 2012, drives outnumber hypermarches p36
Drives in France: no trading permits needed, boom in the format p37
Drives: Outlet numbers per retailer, Q1 2013 France p38
France: rather to cannibalise oneself than be eaten by others, questions around profitability p39
Drives in France – the leading players p40
France: H1 2013 sales figures, Leclerc, the market leader p41
France: Latest sales figures, Leclerc, testing new models p42
France: Latest sales figures, Systeme U, Carrefour lagging behind p43
Carrefour: trying to connect online grocery to mobiles p44
Auchan – the innovator p45
Auchan: the innovator, the e-commerce structure, Auchandirect,, Grossbill p46
Auchan: figures, hyper vs. Chronodrive 2012, average sales and growth p47
France: The development of the drive solution p48
Recent key developments: car sharing, new formats, Simply Market drives, Arcimbo p49
Auchan: Chronodrive/AuchanDrive, H1 2013 statistics, sales, customer numbers, baskets p50
The Chronodrive model: the innovator p51
Chronodrive: arterial roads, pure solution versus add on, cost management p52
France: As no trading permits were needed, a boom in the format followed p53
The outlook for drives in France, loi Duflot p54
France: combining the opportunities of the drive with the store, innovation p55
Drives: is the party over? The pessimist’s view, saturation and regulation p56
Drives: the implications of the Loi Duflot, regulation but no tax increase for now p57
Drives: stand alones curtailed, shift from expansion driven growth to lfl, pureplays benefit p58
Drives: shift back to home delivery for online grocery in France? p59
Benelux – Ahold, from Peapod to Albert via to Albert Heijn to go, Delhaize and Colruyt p60
Albert Heijn: the online grocery opportunity, from to PUPs p61
Albert Heijn: click & collect and drive, % uplifts from comprehensive multi channel strategy p62
Albert Heijn: from 2% customer crossover to double digit % of channel agnostic shopper p63
Albert Heijn: 3 drive formats, Capex and sales potential, EBIT and forecast p64
Albert Heijn: reorganising the supply chain p65
Ahold: the acquisition and a 3P marketplace p66
Albert Heijn: and Plaza integration, PUPs in all Ahold stores by 2014? p67
Recent key developments: July, August 2013, PUPs at work and at the airport p68
Recent key developments: January 2013, the big push, widening the ranges and new DC p69
Recent key developments: December 2012, the first PUPs, big push into m-commerce p70
Recent key developments: November 2012 integrating BOL through click & collect p71
Belgium – Carrefour, Delhaize and Colruyt, the first hard discounter with an online grocery proposition p72
Delhaize: from caddyhome to collection points p73
Colruyt: Collect & GO, Collishop and Collivery, 5k new customers per collection point p74
Colruyt: the back end organisation p75
Colruyt: France collect & go, drives at the hard discounter, a model for Aldi and Lidl? p76
Drives – a struggling concept in Germany, just as online grocery in general p77
Germany: Online grocery going head to head with Lidl and Aldi, p78
Germany: Amazon 1P and 3P delivery issues p79
Recent developments: Migros private label on p80
Germany: Lidl’s non food online store and the demise of Schlecker p82
Germany: Real’s online grocery sales – strong growth from tiny base p83
Drives: Globus, Edeka and Rewe trialing drives p84
Germany: Rewe’s start up incubator, looking for acquisitions, Tengelmann’s Bringmeister p85
Amazon: Germany Packstationen prevent need for proprietary Amazon lockers p86
Recent developments: DHL trials parcel boxes in Bonn and sets up its own marketplace p87
German post invest big into working underutilisied capacity harder p88
Mytime: Buenting pioneering national coverage p89
Mytime: Buenting piloting same day delivery with DHL in Köln p90
Allyouneed: DHL backed start up p91
LeShop – a model for multichannel integration at Migros. Applicable to the German market or a real exception? p92
LeShop: a model for other markets? p93
LeShop: rebounding and rebuilding profitability, as Swiss shop abroad and Coop competes p94
LeShop: link up with Swiss Post, home deliveries only pm or evenings p95
LeShop: Chilled storage box solution – no need for cool chain p96
LeShop: the data, 55k regular annual customers, average basket 2x as big as EU sector p97
LeShop: M-commerce and the Migros advantage p98
Recent developments: LeShop CHF1.9m in drive sales in 6 months, C&C at Swiss Rail p99
LeShop: Drive, new customer acquisition, basket size half of delivery, 3x bigger than in-store p100
Italy – the EU’s periphery is lagging behind, macroeconomic headwinds and retailer inertia p101
Italy: little movement, all concentrated on the North of the country, one Auchan drive p102
Italy: Esselunga, e-coop, prontospesa, basko and organic box schemes, Italian obstacles p103
Esselunga: Delivery charges waived for old age pensioners p104
Coop: online grocery Roma only, push into non food in 2013 p105
Spain p106
Spain: Online grocery curtailed by tough macro economic headwinds p107
Spain: Eroski, Mercadona, El Corte Ingles, Alcampo – much activity p108
Spain online grocery sales: in €m per retailer in 2012, Top 10, % of total, coverage p109
Spain: delivery charges, online grocery shopper profile p110
Spain: the demise of p111
Spain: organic box schemes, pureplayers and an outlook p112
Click & collect in the UK: the footfall driver p113
Click & collect: The UK starts to follow the French example, fulfillment revolution p114
Click & collect: Waitrose’s locker system plans, 24hr access p115
Click & collect: Waitrose splitting the mundane from the aspirational shop p116
Drive thrus: Asda trialing drives and rolling them out to every store p117
Tesco: Grocery click & collect and drives, potential to use c-stores for click & collect p119
Click & collect: Tesco opens click & collect to its marketplace sellers in 2013 p120
The laggards are coming online: Iceland, Morrisons and Ocado p121
The laggards are coming online: Coop, the latest entrant p122
Click & collect UK: future outlook, innovative supply chain solutions, collaboration p123
Same day delivery – is this the future for home delivery? From Amazon to Instacart p124
Same day delivery: the new frontier, Instacart letting shoppers help each other p125
Instacart: expansion to Chicago, other major US conurbations to follow p126
Amazon: same day delivery, Amazon Fresh and Prime, Wal-Mart p127
Strategic recommendations: Tackling delivery costs through collaboration, 4 innovative solutions p128
Margins: all about route optimisations and efficiency, the rise of click & collect and lockers p129
Solution 1: hubs on the outskirts, bundling trips from all retailers, milk round deliveries p130
Solution 2: combining online grocery with food service, comprehensive solution p131
Solution 3: the potential of the return trip, looking at lessons from in bounding p132
New concepts: making online grocery deliveries efficient p133
Solution 3: Reducing the empty runs, interleaving p134
Solution 3: Partnerships will become a necessity as online shopping continues to expand p135
Solution 4: Hubbub, let the 3PL sort out efficient home delivery by grouping trips p136
Linas Matkasse and the copycats – tackling delivery costs differently – the subscription solution and unique product p137
Linas Matkasse: Swedish innovation p138
Linas Matkasse: curated shopping in online grocery, skills enhancer p139
Linas Matkasse: innovative loyalty generation, the data p140
Linas Matkasse: foreign expansion p141
Aarstiderne: The Danish market leader, nemlig, Superbest p142
Sources p143