Deliveroo masters ‘dark arts’ with new grocery venture

Deliveroo’s dive into online groceries will give the market a “long-overdue” shake-up, according to analysts.

The startup last week announced the launch of Deliveroo Hop, which will deliver from a network of “dark” stores, in central London.

It will use supermarkets as wholesalers – rather than delivering from them directly – to supply the stores.

According to Proactive, investment bank Jeffries said this would combine dark store efficiency with retailers’ superior supply chains and brand awareness.

READ MORE: Morrisons and Deliveroo team up for rapid grocery service

“It’s a model that extracts the best of both the partnership model and the dark store model while negating their weaknesses,” it said.

Hop has only established a partnership with Morrisons, but Deliveroo boss Will Shu suggested he would work with other supermarkets to expand its coverage.

Its operations are currently limited to Battersea and Vauxhall.

The move towards grocery dark stores brings the startup into line with its “quick commerce” rivals, including the multinationals Gorillas and Getir.

“In essence, this is Deliveroo replicating its success with the ‘dark’ model in restaurants,” Jeffries said.

However, this has proved a controversial system, with restaurant owners accusing the company of “stealing our customers”.

Jefferies rates Deliveroo a “buy” with a share price target of 435p.

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