The convergence of cheap capital, fast internet and national lockdown supercharged what had been until then a mostly supermarket-centred grocery delivery market (Ocado the major mover). Very quickly a hundred different delivery flowers bloomed – many of which are wilting now that costs have gone up and people have gone back to work.
During Covid, the streets might have been largely empty of cars, but they buzzed with thousands of mopeds with big square branded pillion boxes, as delivery freelancers working for Gorillas, Deliveroo, Getir and many others, zoomed around delivering bread, milk or chewing gum, curries, MacDonalds meals and loo roll (if you could get hold of it).
Convenience stores and their customers were welcome to use these services – either apps or platforms such as Just Eat – but there was a whopping fee to pay to the company, and on top of that a charge for the delivery itself. Unsurprisingly, the delivery outfits worked best with higher value orders – such as restaurant takeaway meals – but at the same time, lockdown retailers began to see the advantages of bringing back delivery for their businesses.
Halo effect
First, it was probably the need to build and deepen community relations, especially to the benefit of the old and infirm who could not leave their homes during the pandemic. But the way it was done was often ad hoc, with individual retailers and stores arranging their own delivery methods and schedules, and doing it themselves or using their own staff.
Soon, it became clear not only that the service was adding to trust and reputation regarding the convenience channel, but also that there was a “halo effect”: customers who had never set foot in a particular store would happily order from it groceries to be delivered, extending the consumer catchment area often by several hundred per cent – say, from a one mile- to a three-mile radius.
Indeed, leading c-store platform Snappy Shopper reported that roughly 80 percent of their customers using the app were acquired through the platform and would never have visited their physical store. Alongside this, customers are more likely to spend more money when using the app, as retailers report a £26 average basket spend, compared to only £10 in-store – an increase of a remarkable +160 per cent.
Now, the moped-led multiple services, which were over-saturating the grocery delivery market as it mushroomed under lockdown – are in a death struggle, with many being bought up by bigger competitors, or simply closing down operations in various territories.
Some survivors are specialising in delivering meals from so-called dark kitchens, providing tangential competition for the food-to-go services of c-stores; but others (Getir, Weezy) are starting to operate grocery delivery operations, similar to the Ocado depot model, but on a smaller more local scale from their own dark warehouses, representing a much more threatening challenge to local retail stores.
Lumina says that food to go and promotions are key to delivered meal occasions for convenience. Delivered meal occasions remained stable in the 52-week period ending on 11 December 2022 compared to the previous year as shoppers continue to trade down from out of home occasions to manage spend. The report shows that the choice of food to go, fresh produce, and promotions are all more important for delivered meal occasions compared to in-store. Offering promotions on a range of ready meals is one way to win.
A Co-op grocery store worker loads a bag inside an autonomous robot called Starship prior to its delivering groceries in Milton Keynes, England on September 20, 2021. (Photo by DANIEL LEAL-OLIVAS/AFP via Getty Images)
Clearly the delivery category is in a period of intense change and development, with battle lines drawn between the retailers of the grocery sector and the pure-play delivery companies who do not operate retail premises. The supermarkets continue to operate delivery as a loss-leader, but there is evidence that the rewards to a business from delivery are inversely proportional to size: for grocery delivery, “small is beautiful”, because it can add revenue to c-stores, whereas it eats into revenue for larger chains forced to operate a massive delivery organisation.
Apps such as Beelivery (which travels from c-stores to consumers) is one example of a service that could prove profitable for retailers. “Forget waiting weeks for a delivery slot from your favourite supermarket,” it tells shoppers. “Beelivery are able to drop off all your essentials within 45-90 minutes thanks to its team of local riders. Options differ depending on where you’relocated as the drivers pick up from local shops, but the range is impressive. Fruit, veg, dairy, meat and pantry are all covered as well as less essential items like fizzy drinks and sweet treats as well as a few toiletries. It’s a real one stop shop.”
Very appy
The big contender, though, must remain Snappy Shopper – an app but also a platform – which started in Scotland and accelerated during lockdown, and which is now spreading throughout the UK – unlike many niche or bespoke delivery apps (Farmdrop, Hey Delivery) that need to be in London or a few other large conurbations to make any kind of economic sense.
"Home delivery is an essential part of the future success of convenience stores, enabling them to widen their community network and future-proof their business against the competition," explains Snappy’s Dael Links.
“Retailers have reached a crossroads; they need to diversify their delivery options and invest in the right technology to meet the ongoing needs of their consumers, or they will struggle to compete. As working from home has become the norm for more people, their appetite for convenient and fast deliveries that fit their at-home lifestyle has increased.”
The Snappy Shopper app cuts out the fees from the delivery firms by leaving the last-mile method up to the creativity of the retailer. What it does is match convenience of purchase with price and locality, giving c-stores delivery “four-wheel drive” effects.
“Consumers value convenience more than anything, they still want easy at home delivery despite the current cost-of-living crisis," says Dael. “However, customers are looking for value when they shop, so it is important that prices are competitive. Snappy Shopper never inflate the shelf price, so online prices are the same as in-store, meaning customers can order with no extra costs. Snappy Shopper is the only marketplace with on-the-shelf price that isn’t commission-heavy on retailers.”
The platform is developing all the while, and porting those developments over to the Snappy app. For example, it recently became the first delivery app to allow “reduced to clear” functionality, which will encourage customers to order who previously would only have the option to visit in-store to find marked-down bargains. Partners have complete control over their product list and pricing on the app, with the ability to manage orders and connect with delivery drivers with ease.
The Snappy app enables retailers to drive sales and engage with new customers, whilst also continuing to encourage communities to shop with their local retailers. Vitally, our According to our retailer network, around 80% of their customers who use the Snappy Shopper app were acquired through the platform and would never have visited their physical store. Alongside this, customers are more likely to spend more money when using the app as retailers report a £26 average basket spend, compared to only £10 in-store - that’s a significant increase of +160%.
One Stop, meanwhile, has integrated with Deliverect’s software, which they believe is a real “game changer" as it allows One Stop to integrate all three of their delivery platform partners (Uber Eats, Just Eat and Deliveroo) on one centralised system.
This has provided One Stop with many efficiencies and increased online accuracy across many metrics, enabling them to more than double their online SKU count to around 3000. Deliverect has now rolled out to more than 600 of their company
UK retail sales rose less than expected in the runup to Christmas, according to official data Friday that deals a fresh blow to government hopes of growing the economy.
Separate figures revealed a temporary reprieve for prime minister Keir Starmer, however, as public borrowing fell sharply in November.
The updates follow news this week of higher inflation in Britain - an outcome that caused the Bank of England on Thursday to leave interest rates unchanged.
Retail sales by volume grew 0.2 per cent in November after a drop of 0.7 per cent in October, the Office for National Statistics said Friday.
That was less than analysts' consensus for a 0.5-percent gain.
"It is critical delayed spending materialises this Christmas to mitigate the poor start to retail's all-important festive season," noted Nicholas Found, senior consultant at Retail Economics.
"However, cautiousness lingers, slowing momentum in the economy. Households continue to adjust to higher prices (and) elevated interest rates."
He added that consumers were focused on buying "carefully timed promotions and essentials, while deferring bigger purchases".
The ONS reported that supermarkets benefited from higher food sales.
"Clothing stores sales dipped sharply once again, as retailers reported tough trading conditions," said Hannah Finselbach, senior statistician at the ONS.
Retail sales rose 0.2% in November 2024, following a fall of 0.7% in October 2024.
Growth in supermarkets and other non-food stores was partly offset by a fall in clothing retailers.
The Labour government's net borrowing meanwhile dropped to £11.2 billion last month, the lowest November figure in three years on higher tax receipts and lower debt-interest, the ONS added.
The figure had been £18.2 billion in October.
"Borrowing remains subject to upside risks... due to sticky interest rates, driven by markets repricing for fewer cuts in 2025," forecast Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics.
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, commented that the later than usual Black Friday weekend meant November’s retail sales figures saw only a slight uptick as cost-conscious consumers held off to bag a bargain.
“Despite many retailers launching Black Friday offers early, November trade got off to a slow start which dragged on for most of the month. This was driven by clothing which fell to its lowest level since January 2022. The only saving grace was half-term and Halloween spending helped to slightly offset disappointing sales throughout November,” Baker said.
“As consumer confidence continues to build and shoppers return to the high street, this should translate into more retail spending next year. However, there are big challenges coming down the track for the sector, so retailers will be banking on a consumer-led recovery to come to fruition so they can combat a surge in costs.”
Thomas Pugh, economist at RSM UK, added: “The tick up in retail sales volumes in November suggests that the stagnation which has gripped the UK economy since the summer continued into the final months of the year.
“While the recent strong pay growth numbers may make the Bank of England uncomfortable, it means that real incomes are growing at just under 3 per cent, which suggests consumer spending should gradually rise next year. However, consumers remain extremely cautious. The very sharp drop in clothing sales in particular could suggest that consumers are cutting back on non-essential purchases.
“We still expect a rise in consumer spending next year, due to strong wage growth and a gradual decline in the saving rate, to help drive an acceleration in GDP growth. But the risks are clearly building that cautious consumers choose to save rather than spend increases in income, raising the risk of weaker growth continuing through the first half of next year.”
Dutch dairy collective FrieslandCampina has agreed to merge with smaller Belgian rival Milcobel, creating a leading dairy cooperative.
FrieslandCampina, whose brands include Yazoo and Chocomel, said the merger will provide the foundation for a future-oriented organisation that has dairy front and centre for member dairy farmers, employees, consumers, and customers.
The proposed merger is subject to approval by FrieslandCampina’s members’ council, Milcobel’s extraordinary meeting of shareholders, and antitrust authorities. The companies said member dairy farmers, employees, works councils and trade unions have been informed about the merger proposal.
Both companies, owned by dairy farmers for many generations, complement each other well in market positions and product portfolios. The merger offers further business development opportunities in market segments such as consumer cheese, mozzarella, white dairy products (such as milk, buttermilk, and yoghurt), and ingredients, as well as benefits in efficiency and expertise, for example in the area of sustainability.
“The combination of FrieslandCampina and Milcobel is bigger than the sum of its parts. It creates a future-oriented, combined dairy cooperative that is resilient and capable of capitalising on opportunities in the dynamic global dairy market,” said Sybren Attema, chair of the board of Zuivelcoöperatie FrieslandCampina.
“This strengthens our appeal to member dairy farmers, business partners and employees. Moreover, this step supports us in realising a leading milk price for our member dairy farmers, now and in the future.”
Betty Eeckhaut, chair of the board of Milcobel, said: “The cooperative philosophy, which is deeply rooted at both Milcobel and FrieslandCampina, is the bedrock for this proposed merger. Our goal remains to create added value for our member dairy farmers.
“Through our regional complementarity we will become the cooperative dairy partner of choice for current and new members, with a solid milk supply for a successful future. For employees, the new organisation provides great opportunities to grow in an international environment. For customers, this merger means more innovation, an expanded product portfolio and further professionalisation of our services.”
Based on the combined 2023 annual figures of FrieslandCampina and Milcobel - excluding Milcobel's Ysco business, which is in the process of being divested - the new, combined organisation has a pro forma revenue of more than €14 billion (£11.6bn) , operates in 30 countries, employs nearly 22,000 staff worldwide, and processes a total volume of approximately 10 billion kilograms of milk.
The boards of the cooperatives and executive management of the two parties have signed a framework agreement regarding the proposed merger. The companies aim to finalise a detailed merger proposal in the first half of 2025, which will then be discussed with the members of FrieslandCampina and the shareholders of Milcobel.
The UK government has pledged stronger measures to combat anti-social behaviour and shoplifting, which it acknowledges as serious crimes that disrupt communities and harm businesses.
Addressing a House of Lords debate on Monday, Home Office minister Lord Hanson detailed plans to abolish the controversial £200 shoplifting threshold and to introduce a new offence for assaults on retail workers.
“Anti-social behaviour and shop theft are not minor crimes. They cause disruption in our communities,” Lord Hanson stated.
“Shop theft in particular costs retailers across the nation millions of pounds, which is passed on to us as customers, and it is not acceptable. That is why, on shop theft, we are going to end the £200 effective immunity. For shop workers, we will protect them by introducing a new offence, because they are very often upholding the law in their shops on alcohol, tobacco and other sales.”
He also emphasised the government’s commitment to restoring visible neighbourhood policing, with 13,000 additional officers and Police Community Support Officers (PCSOs) planned, as well as piloting new “respect orders” to ban repeat offenders from town centres.
Later on Wednesday, the home secretary announced a £1 billion funding boost for police across England and Wales to restore neighbourhood policing. The money will include new funding of £100 million to kickstart the recruitment of 13,000 additional neighbourhood officers, community support officers and special constables.
The debate was initiated by Labour peer Baroness Ayesha Hazarika, who painted a vivid picture of the toll anti-social behaviour takes on workers and communities. “Many people who work in shops feel like they are living in a war zone,” she said. “Anti-social behaviour can so often be the canary down the coal mine and tell a wider story about what kind of society we are living in.”
Baroness Hazarika also urged the use of technology such as facial recognition to target hardened criminals responsible for terrorising shops and local residents.
Lord Hanson agreed, adding that the government is equipping police with the resources to better address persistent offenders, including funding initiatives like Operation Pegasus, which targets organised retail crime.
Retail trade union Usdaw has welcomed the Lords debate tackling anti-social behaviour and shoplifting.
“We very much welcome that Baroness Hazarika has raised this hugely important issue for our members. It is shocking that over two-thirds of our members working in retail are suffering abuse from customers, with far too many experiencing threats and violence,” Paddy Lillis, Usdaw general secretary, said.
“After 14 years of successive Tory governments not delivering the change we need on retail crime, we are pleased that the new Labour government announced a Crime and Policing Bill in the King’s Speech and all the measures that it contains, as set out by Lord Hanson.
“The chancellor announced in the Budget funding to tackle the organised criminals responsible for the increase in shoplifting, and the government has promised more uniformed officer patrols in shopping areas. It is our hope that these new measures will help give shop workers the respect they deserve.”
In response to the mounting pressures faced by postmasters across the UK, the Post Office has unveiled a centralised wellbeing platform aimed at simplifying access to support resources.
Post Office said the surge in shoplifting and violent incidents, documented in the 2024 ACS Crime Report, has only intensified the demand for comprehensive support.
With shoplifting on the rise year-on-year since 2021, and the Christmas trading period presenting heightened risks due to increased footfall and stock levels, the wellbeing of postmasters has become a pressing concern.
The new wellbeing platform, accessible via the Branch Hub app, provides a single point of access to a range of resources designed to meet Postmasters' immediate and ongoing needs. It is divided into three sections:
‘I Need Help Right Now’: Offers urgent support, including access to emergency services, mental health first aiders, , area and business support managers and organisations like Samaritans.
‘More Support and Guidance’: Provides practical tools such as security advice, social media abuse resources, and connections to organisations like Citizens Advice and Mind.
‘Access Community Support’: Encourages peer connections through WhatsApp and Facebook groups, as well as in-person meetings.
The initiative, a collaboration between the Post Office, the National Federation of Sub-Postmasters (NFSP), and Voice of the Postmaster, underscores a shift towards a more cooperative approach between historically independent groups, and creates a shared wellbeing network that is accessible to all postmasters, regardless of affiliation.
Mark Eldridge, postmaster experience director at Post Office, said the initiative will ensure that anyone who needs help can find it quickly and easily.
“It’s about creating a culture of care and resilience in the face of the challenges our postmasters face every day. If the initiative means helping just one postmaster, then we have done our job successfully,” Eldridge added.
Tony Fleming, postmaster at Thorne Post Office, shared how the initiative provided vital support following a traumatic armed robbery at his branch.
“It was incredibly difficult for the person faced with this violent threat, as well as the wider team. It’s a traumatic experience to go through as part of your day job and having the immediate support of the Wellbeing resource was invaluable – it really was wellbeing personified and gave me and everyone in the branch the support to get back to doing what we do best, serving our fantastic community in Thorne,” Fleming said.
Paul Patel, a Hampshire-based postmaster, echoed this sentiment, highlighting the platform’s ability to combat isolation and foster collaboration:
“It has been a difficult time for all postmasters who continue to serve their communities every day often feeling alone in their daily work life. It’s such a privilege to collaborate across the network to support Postmasters wellbeing from forming friendships to guiding for more professional support.”
Christine Donnelly of the NFSP highlighted the initiative’s accessibility and symbolic value.
“From a postmaster perspective this works on several levels. It is an easily accessible resource that offers advice and facts, but it also says by implication that we care, that participants from different areas of the business recognised a need and worked together to make it the best it could be,” Donnelly noted.
“It says you are not alone or the only one - how can you be if there is a whole site available?”
The Post Office plans to evolve the platform based on postmaster feedback, ensuring it remains relevant to emerging challenges.
Earlier this week, Post Office has announced a £20 million boost for postmasters to address their concerns that their income has not kept up with inflation over the past decade.
Both independent postmasters and Post Office’s retail partners that operate branches on its behalf will receive the top-up payment ahead of Christmas. The top-up payment will be based on both the standard fixed and variable remuneration the branch received in November.
Independent retailers have weathered one of their most challenging years in 2024, with multiple headwinds affecting the sector, according to the British Independent Retailers Association (Bira).
With pressures mounting throughout the year, independent retailers have faced an increasingly difficult trading environment marked by changing consumer behaviour and economic uncertainties.
"2024 has presented unprecedented challenges for independent retailers,” said Andrew Goodacre, CEO of Bira. “Consumer spending on non-food items has declined significantly, while persistent footfall problems and fragile consumer confidence have impacted high streets nationwide. Despite inflation coming under control, interest rates are falling slowly, affecting both business and consumer spending."
"The retail landscape has become increasingly competitive, with large chains implementing deeper and longer discount periods. The rise of ultra-fast fashion retailers like Shein and Temu has created additional pressure on margins, whilst deflation on non-food items has further squeezed profits," he added.
The sector has also grappled with retail crime, with Bira's latest survey showing 78.79 per cent of businesses reporting increased frequency or severity of theft incidents.
Research from PwC earlier this year also highlighted the scale of the challenge, with 6,945 outlets shutting – equating to 38 store closures per day, up from 36 per day in 2023. The figure outnumbered the rate of new store openings, which rose modestly to 4,661, averaging 25 openings each day.
Mr Goodacre said: "The key difficulties independent retailers are grappling with include low consumer demand, as consumer confidence remains fragile and shoppers are highly value-focused. Independent shops struggle to compete on price as large chains are able to discount more deeply and for longer periods."
Looking ahead to 2025, retailers face new challenges. He added: "Medium-sized retailers will see a significant increase in employment costs, while thousands of smaller retailers will be hit with higher business rates as relief drops from 75per cent to 40 per cent."
However, Mr Goodacre said he sees reasons for optimism and added: "We expect 2025 to bring some positive changes. Wages are set to rise faster than inflation, which should boost consumer spending. Both inflation and interest rates should continue to fall, helping to rebuild consumer confidence."
"The circular economy presents a growing opportunity for independent retailers, and with economic growth set to improve, we anticipate better trading conditions. While challenges remain, independent retailers who stay adaptable and resilient will find opportunities in the year ahead."