Business Day

Grocery delivery services ramp up

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Fitch Solutions, a division of the global financial informatio­n services company Fitch Group, says grocery delivery services are fast becoming a mainstream offering in SA, with a significan­t rise in first-time users.

It expects to see a rapid increase in the e-groceries sector in the next seven years, particular­ly among urban and wealthier consumers looking for convenienc­e.

Establishe­d grocery retailers, including Checkers, Pick n Pay and Woolworths, have all introduced an e-commerce offering in recent years using courier and logistics providers to handle deliveries.

The most successful player in this space is Checkers with its Sixty60 grocery deliver app which has re-positioned the brand from a convenienc­e perspectiv­e. According to holding company Shoprite’s latest annual financial results, Checkers Sixty60 continues to maintain its growth trajectory. The app recorded a 150% increase in annual sales and is the top local grocery app with 2.4-million downloads. The retailer currently services Sixty60 customers from 300 stores around the country.

RTT On-Demand, a division of the RTT Group, has played a key role in last mile logistics for Checkers Sixty60 from its launch. To enable more innovation and to protect the intellectu­al property of the Sixty60 sales channel, in late 2021 Shoprite entered into a joint venture with RTT Group. Both parties own 50% of the joint venture logistics entity.

Pick n Pay offers online grocery shopping through an on-demand service called Asap. In 2022, the retailer launched a new PnP Groceries section on Takealot’s Mr D platform, with orders delivered by Takealot’s delivery fleet in a bid to expand its on-demand delivery service capabiliti­es. PnP Groceries is intended to be available nationwide by the end of 2023.

Spar was a late arrival to the same-day grocery delivery space, only launching in March 2022. It has partnered with SkyNet Worldwide Express and Inhance to provide the last mile delivery of its SPAR2U delivery service.

Diederick Stopforth, sales and marketing executive at SkyNet, reveals that unlike many of its competitor­s, SkyNet is leaning towards a predominan­tly electric delivery fleet utilising both two-wheel and three-wheel variants.

He says: “Beyond the obvious environmen­tal benefit in reducing carbon footprint, there are operationa­l gains in lowering the cost per unit as well as capacity in the threewheel vehicles to deliver significan­tly larger orders.”

As a late entrant to the market, Spar and its partners have been able to adapt its model from the early mover learnings.

“Our intention medium term is to optimise the delivery model by serving all tenants of any given centre through the same delivery fleet. The larger loading capacities of the threewheel­ers means that we can consolidat­e a number of orders in the same vehicle,” he says.

“This has many advantages. Not only does it offer retailers delivery at a reduced cost, but it benefits gig economy drivers who will be able to reduce the costs in serving multiple revenue-generating deliveries on a single delivery run.”

In 2022 Uber Eats launched Uber Eats Market in partnershi­p with Smart Kitchen Co, initially as a pilot project in some areas of Cape Town and later to nine online store presences around SA. It plans to have markets operating in more than 30 locations by the end of March.

A number of other e-grocery players have also entered the local market including Algerian on-demand food and grocery delivery platform Yassir Express and Zulzi. The former, which has become popular in a number of north African markets, launched in Gauteng in December 2022, offering a high-speed delivery service in just 30 minutes based on a dark store model.

Zulzi is another addition to the on-demand grocery delivery sector, promising delivery in an ambitious 15 minutes. The platform provides delivery via 300 independen­t drivers.

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 ?? ?? Above: Spar has partnered with SkyNet Worldwide Express and Inhance to provide the last mile delivery of its SPAR2U delivery service. Right: Diederick Stopforth, sales and marketing executive at SkyNet.
Above: Spar has partnered with SkyNet Worldwide Express and Inhance to provide the last mile delivery of its SPAR2U delivery service. Right: Diederick Stopforth, sales and marketing executive at SkyNet.

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