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The UK's largest grocery chain Tesco is trying to fend off online competition with one-hour delivery
BI Intelligence
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Tesco, the UK’s largest grocery chain, is partnering with last-mile logistics startup Quidup to provide one-hour delivery for online grocery orders to customers in central London, TechCrunch reports.
Customers will be able to select up to 20 items from the 1,000 products available for the service, and their orders will be picked and delivered by Quidup’s staff. One-hour delivery will come with a £7.99 (about $10) service fee, and a two-hour delivery option will boast a £5.99 (about $8) fee.
Tesco has been seeking to turn delivery into an advantage in the UK’s growing online grocery market. The chain already has a well-established click-and-collect service, providing same-day in-store pickup for online grocery orders at more than 300 locations in the UK. The number of customers using the service has increased by 20% in the past year, Tesco reported. The grocer has also tested autonomous ground delivery robots from Starship Technologies to automate online grocery deliveries. The launch of one-hour delivery in London is an extension of these delivery efforts, aimed at helping Tesco defend its lead in the UK grocery market as more grocery spending shifts online. The country’s online grocery segment is expected to grow from $13 billion last year to $19 billion in 2020.
This online growth will provide opportunities for new entrants — particularly Amazon — to steal grocery market share in the UK. Amazon launched its AmazonFresh online grocery delivery service in London last year with one-hour deliveries.
Additionally, its recent acquisition of Whole Foods, which operates several stores in London, could allow Amazon to add Whole Foods’ own organic food brands to AmazonFresh deliveries. Offering customers a variety of ways to quickly collect their grocery orders will grow more critical for Tesco and other UK grocers as Amazon seeks to expand its presence.
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