EXCLUSIVE: Delivery apps weighed against ‘dark site’ threat
Nationwide partnerships deliver 'superior margins' according to one major symbol group
Store owners are divided over whether delivery firms Deliveroo and Uber Eats represent an opportunity or threat to the independent convenience sector.
Costcutter announced a nationwide partnership with Uber Eats that it said offered retailers “discounted sign-up costs and superior margins”. It claimed trials in centrally owned stores added £1,500 to their monthly sales.
Meanwhile, Nisa announced at recent retailer meetings that it had signed a deal with Deliveroo, giving stores a 5% cut in the commission taken by the company when stores use it as their exclusive online delivery partner. This equates to 25% commission for Deliveroo rather than its standard 30%.
One Nisa store said the deal would allow them to “be more competitive” with other convenience operators already on Deliveroo – such as Co-op.
The multiple announced earlier this year that it is expanding its trial with Deliveroo, where it is the only convenience retailer allowed to sell tobacco through the platform.
Co-op’s average basket spend is £15, with 450 lines available to order.
However, Amrit Singh, of H & Jodie’s Nisa local in High Heath, Walsall, said he had cut ties with both online providers this month, following concerns about their access to his customers.
Read more: Co-op confirms Deliveroo delivery expansion
In the takeaway space, both companies have set up ‘dark sites’ – commercial kitchens set up in industrial units to compete with the companies’ existing partnered locations.
Singh said: “Uber Eats and Deliveroo know everything about the businesses that trade through them, who and where their customers are, what they sell, how much they sell, when they sell it and how much they sell it for. They took all this information and used it to set up their own rivals.
“If they can do this in foodservice, imagine what they’ll do in convenience.”
The warning comes as UK regulator the Competition and Markets Authority investigates concerns that Amazon’s planned acquisition of Deliveroo could harm competition.
Asked about Singh’s concerns, Richard Fletcher, managing director of Foodservice Online, said: “This kind of practice already exists – we see this all the time with Amazon, where a product achieves strong sales, and is spotted by Amazon, which launches its own version and pushes it to the top of the search results.”
However, Londis Greenford retailer Kay Patel argued that retailers have to follow what their customers desire.
He said: “Customers expect everything to be delivered now. Even a little bit of rain and people just order online.
“We are looking at introducing Deliveroo, but the commission is the biggest challenge.”
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