0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

are home delivery services by the big four supermarkets sustainable?

17 July 2014

With the news that Ocado has posted a profit for the first half of its financial year, there are hopes it will make an annual pre-tax profit for the first time since it was founded in 2000.

However, a survey by Knight Frank has revealed that home deliveries are a loss-leading service which may ultimately be unsustainable.

Much has been made of the high fixed property overheads involved in operating from large retail stores, and the various approaches being taken to delivering maximum value from these assets but perhaps more focus needs to be given to whether home deliveries are actually a long term market trend, particularly if the real cost of supplying this service through the logistics chain cannot be cut and ultimately needs to be passed on to consumers.

If it is accepted that the current level and cost of home delivery cannot continue, it puts an interesting slant on the traditional ‘race for space’, with rentals for new large stores nationwide now being significantly lower than the height of the market in 2012. This opportunity for increased market share is being seized by the discounters and it’ll be interesting to see what the big four do next.

related opinions

The London Fashion Week problem - Brexit and the protection of designs in the UK

London’s prized position as one of the ‘big four’ fashion capitals could be threatened by changes to IP protection following Brexit.

View blog

Sainsbury’s response to Amazon’s entry into the grocery business

Hot on the heels of yesterday’s news of Amazon’s acquisition of Whole Food, Sainsbury’s look to expand with a proposed acquisition of Nisa.

View blog

Amazon sets the supermarkets in its sights!

Well, I think we all knew this was coming. It felt like only a matter of time before Amazon decided to focus its sights on the grocery business.

View blog

Virtual reality payment - it’s all in your head

Alibaba, one of China’s largest technology companies, recently demonstrated VR Pay, a payment service designed to allow virtual reality shoppers to pay for things simply by nodding their head.

View blog

mailing list sign up



Select which mailings you would like to receive from us.

Sign up