The rapid grocery delivery sector has boomed in recent years as the likes of Uber Eats, Deliveroo and Just Eat have partnered with many of the UK’s leading supermarkets.
As consumer demand for convenience online has held firm even as memories of the pandemic fade, many grocers have rushed to get a foothold in the quick commerce sector.
However, for the Co-op it is a big strategic play as quick commerce is “making convenience more convenient”, according to the retailer’s food managing director Matt Hood.
He has big ambitions on this front. In the next four years, the retailer aims to capture 30% of the overall quick convenience market share.
Where does Co-op stand in the quick commerce sector?
Co-op currently partners with major players including Uber Eats, Deliveroo, Just Eat and Amazon, as well as the likes of Snappy Shopper and robot delivery service Starship Technologies.
In the past year, it has continued to grow these partnerships, having expanded to nearly 1,000 stores with Just Eat last May, and just last month marked a first for UK supermarkets as it launched in-app member pricing for shoppers using the Uber Eats app.
The grocery retailer currently represents 23% of the quick commerce market in the UK and has an ambition to get to over 30% “as quickly as possible”.
Hood says that as of a couple of weeks ago, Co-op is now “the biggest grocery player on Uber’s platform, on Just Eat’s platform, and on Deliveroo’s platform”.
Is quick commerce profitable for Co-op?
Chief financial officer Rachel Izzard says that quick commerce is “absolutely profitable” due to Co-op’s “very unique infrastructure”, referring to its vast network of neighbourhood stores.
Hood agrees: “The big difference for us is we have 2,500 of our own mini depots servicing this, we have stores in every postcode area so they can…service all of those communities, and meand that we can run a quick commerce business that covers 80% of the country.
“It enables us to get most of those baskets satisfied in anything as low as 15 to 20 minutes.”
Could Co-op surpass its 30% target?
Over 2023, Co-op said its online sales reached £311m, up from £222m as it secured the top position in the quick convenience market in the second half of the year.
Hood says that figure came despite Co-op’s quick commerce business having only been set up around four years ago. He boasts that this year’s sales will “dwarf” 2023 levels.
Hitting 30% of the market may seem a big target, however, Hood harbours even greater ambitions. “I would hope that in a year’s time we’ll come back and say that the 30% is now 35% or 40%,” he says.
“We have made it our ambition to be the number one in the UK for the quick commerce market and I can only see us continuing to do that.”
With solid growth targets and strong relationships with its rapid delivery partners, it seems likely that Co-op will achieve or even surpass this 2028 goal as its groceries continue to reach even more doorsteps across the UK.
