Following similar recent moves from other third-party delivery services, Deliveroo is expanding its presence in the world of online grocery shopping. At the tail-end of last week, grocery chain Waitrose announced it will pilot a 12-week program with Deliveroo to get groceries to customers around the UK in as little as 30 minutes.
The news comes just as Waitrose’s longstanding deal with online grocery retailer Ocado comes to an end. From Tuesday, September 1, Ocado will instead deliver groceries from Waitrose rival Marks & Spencer.
Deliveroo will ferry more than 500 Waitrose items to customers “in as little as 30 minutes,” according to the Waitrose press release. Customers will be able to place orders via Deliveroo from one hour after the shop opens to one hour before it closes. Waitrose says the partnership is meant to “compliment” its own two-hour grocery delivery service.
The Guardian noted over the weekend that Waitrose has seen more than 100,000 extra orders for online groceries since the UK’s pandemic-induced lockdown started. Online grocery orders across the UK have almost doubled thanks to the pandemic. It’s a similar story to what the U.S. is currently experiencing where grocery e-commerce sales hit $7.2 billion in June.
Given all that, it’s no surprise that third-party restaurant delivery services like Deliveroo are diversifying their sales channels to include grocery. Deliveroo, in particular, has struggled to keep business strong during the pandemic as restaurants shutter permanently. For example, the Competition and Markets Authority (CMA), the UK’s antitrust watchdog, finally approved Deliveroo’s long-scrutinized deal with Amazon on the grounds that Deliveroo would have had to exit the UK food delivery market without the Seattle giant’s investment.
Adding more grocery services is one way to make up for some of the lost restaurant sales. New sales channels may also give third-party delivery services a fighting chance a profitability, something that keeps getting eroded by fee caps, battles over worker classification, and other regulatory issues.
It’s a narrative we’re familiar with in the U.S., too. Uber Eats now delivers groceries, and DoorDash just announced its own grocery delivery service in addition to its partnerships with convenience stores.
The initial Deliveroo-Waitrose trial, which also starts September 1, will serve about half a million households and, if successful, will extend to more locations in the future.