Big 4’s convenience stores face grocery startup threat

Sainsbury’s and Tesco convenience stores could see their sales hit by on-demand grocery startups, according to a Credit Suisse report.

The authors said that Tesco Express and Sainsbury’s Local are equally at risk in London, where most grocery startups are based.

However, Tesco has more convenience stores throughout the UK and could be hit harder as startups expand from the capital.

READ MORETesco profits plummet 20% despite surge in grocery sales

One potential rival is Weezy, which launched in Manchester a week ago and in Brighton and Bristol last month.

The startups could also threaten Ocado Zoom, which delivers Ocado goods in 60 minutes – six times slower than delivery service Dija claims to.

Morrisons is thought to be at less risk because it has fewer convenience stores than the rest of the Big 4.

The report authors noted the grocer could supply on-demand services “without diluting its existing business model.”

However, Morrisons announced last month that it would open 300 convenience stores in an agreement with McColl’s.

The report comes after grocery startup Beelivery secured a £4.5 million investment to aid its expansion attempts.

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