Deliveroo Launches 10-Minute Grocery Delivery Service

Words by Retail Bum

Deliveroo Launches 10-Minute Grocery Delivery Service
Deliveroo Launches 10-Minute Grocery Delivery Service
On-demand food delivery company, Deliveroo, is partnering with British supermarket chain Morrisons to launch “Hop,” its new 10-minute grocery delivery service.

The service, which is initially being rolled out in South London, will rely on dark stores to quickly prepare orders and dispatch them with the help of couriers. Morrisons will stock the dark stores with its inventory.

The launch of the service puts Deliveroo in direct competition with emerging startups such as Britain’s Zapp, Turkey’s Getir and Germany’s Gorillas that are all competing to meet consumers’ demand for ultra-fast grocery delivery.

While these startups are being favored by investors who have poured in hundreds of millions of dollars, retail analysts’ have questioned the long-term sustainability of their business model as these companies must burn through significant cash to differentiate themselves, gain momentum and become profitable.

“The amount of money that’s being put against this opportunity is grossly disproportionate to the size of the opportunity,” Luke Jensen, CEO of Ocado Solutions, a unit of U.K. grocery tech pioneer Ocado, told CNBC earlier this year.

“I suspect there will inevitably be a lot of consolidation among these players.”

Deliveroo saw its stock climb up 1.7 percent on Thursday after the news of its partnership with Morrisons broke. Morrisons, however, saw its share value dip by 0.7 percent.

The Amazon-backed delivery company went public in March this year. The widely-watched IPO was an unmitigated disaster, with the company’s stocks plunging 26 percent below its listing price, wiping $2.8 billion off its market cap.

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