Online Grocery Retailing In The EU 2014Release date: October 29th, 2013 (146 pages) PDF/Powerpoint format. Price: GBP1,999.00 |
Abstract
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, Auchan.fr, 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 Bol.com to Albert Heijn to go, Delhaize and Colruyt | p60 |
Albert Heijn: the online grocery opportunity, from BOL.com 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 BOL.com acquisition and a 3P marketplace | p66 |
Albert Heijn: Bol.com 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, Amazon.de | p78 |
Germany: Amazon 1P and 3P delivery issues | p79 |
Recent developments: Migros private label on Amazon.de | 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 Alice.es | 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 |