Supermarkets and Internet - UK experience......

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ascroft

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#95822 13-Jan-2012 23:18

Thought this was quite interesting..... I think we will head in this direction - maybe 2-3 years behind.

http://www.guardian.co.uk/business/2012/jan/12/tesco-consumer-revolution-internet-shopping

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#568656 13-Jan-2012 23:37

Not so far behind at all really. Ive been online grocery shopping with Countdown since before the September 2010 quake. Now Im over in Greymouth I still use them... and the groceries are couriered over from Christchurch! Order on a monday and they are delivered by wednesday. (or whatever day you nominate) You can shop weeks ahead if you want.

Way easier to buy on all the specials, (they have all the specials in one section) and I can generally save about $30 that way. The only drawback is they wont ship refrigerated frozen goods to me because of the distance. But I do the best fruit and vegs and a bigger choice of everything via this method. Love it...

casewindow

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#568666 14-Jan-2012 00:11

We have used Woolworths (now Countdown) internet based grocery shopping in NZ ever since 2000 (when it first launched). We do weekly shops.

We used Sainsburys when we were in the UK for three years from 2004-2007.

Basically we've not done a proper full grocery shop (in store) except for a handful of times when we were first in the UK and had not set up internet grocery shopping. We do still go through the store every now and then - but it is usually to get just a few bits and bobs we may have run out of or at xmas time when we want to see the in-store specials.

It is much better than the nightmare of going through the store each week/fortnight.

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Snowflake

#568670 14-Jan-2012 00:25

i've been using foodtown/countdown online shopping since 2000 or so also...

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gzt

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#568699 14-Jan-2012 09:38

The article indicates there is substantial competition in internet shopping in the UK. With enough vendors that shoppers can use the internet to compare before buying in-store. Neither is the case here yet.

Smaller market, but the current duopoly at the top of the food chain probably does not help.

sbiddle

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#568701 14-Jan-2012 09:44

gzt: The article indicates there is substantial competition in internet shopping in the UK. With enough vendors that shoppers can use the internet to compare before buying in-store. Neither is the case here yet.

Smaller market, but the current duopoly at the top of the food chain probably does not help.

With the exceptionally heavy manufacturer funded discounting that occurs in NZ supermarkets the benefits of shopping around are significant, but obtaining data to develop such an app isn't an easy thing to do.

While there is in effect a doupoly in NZ supermarkets don't let that fool you into a lack of competition. The competition between Progressive and Foodstuffs is extremely intense, something that's not normally the case with a traditional duopoly.

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#568703 14-Jan-2012 09:58

sbiddle: While there is in effect a doupoly in NZ supermarkets don't let that fool you into a lack of competition. The competition between Progressive and Foodstuffs is extremely intense, something that's not normally the case with a traditional duopoly.

I agree, it works well for most areas. Just not in online shopping. As above, Progressive has offered online shopping (with a slowly increasing list of items) for over 10 years. Foodstuffs, nothing, despite having a choice of three excellent flagship brands they could use for the purpose.

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#568713 14-Jan-2012 10:17

gzt:
sbiddle: While there is in effect a doupoly in NZ supermarkets don't let that fool you into a lack of competition. The competition between Progressive and Foodstuffs is extremely intense, something that's not normally the case with a traditional duopoly.

I agree, it works well for most areas. Just not in online shopping. As above, Progressive has offered online shopping (with a slowly increasing list of items) for over 10 years. Foodstuffs, nothing, despite having a choice of three excellent flagship brands they could use for the purpose.

Foodstuffs are a co-operative with 3 different companies in NZ (South Island, lower NI and upper NI). All stores are individually owned, something that isn't the case with Progressive, or any major Australian or UK supermarket chains.

This means that across the the 3 co-operatives that things such as pricing differ, and because stores are individually owned and have the ability to do whatever they like with pricing (with large numbers of differnt pricing profiles depending on store location and size) it creates many logistical nightmares that aren't easy to solve.

Despite the fact it's growing the actual $ turnover of Countdown's online shopping is absolutely minute, and I'm not yet sure if it actually generates revenue or is still a loss leader for them.

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#568716 14-Jan-2012 10:23

gzt: As above, Progressive has offered online shopping (with a slowly increasing list of items) for over 10 years. Foodstuffs, nothing, despite having a choice of three excellent flagship brands they could use for the purpose.

I could've sworn that I've seen New World home delivery vans around the place, but I can't find anything on the NW site! It boggles the mind really...

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#568718 14-Jan-2012 10:25

Behodar:
gzt: As above, Progressive has offered online shopping (with a slowly increasing list of items) for over 10 years. Foodstuffs, nothing, despite having a choice of three excellent flagship brands they could use for the purpose.

I could've sworn that I've seen New World home delivery vans around the place, but I can't find anything on the NW site! It boggles the mind really...

Maybe there is a closed beta going. Progressive (Woolworths brand) did that in the beginning as well.

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#568721 14-Jan-2012 10:35

Behodar:
gzt: As above, Progressive has offered online shopping (with a slowly increasing list of items) for over 10 years. Foodstuffs, nothing, despite having a choice of three excellent flagship brands they could use for the purpose.

I could've sworn that I've seen New World home delivery vans around the place, but I can't find anything on the NW site! It boggles the mind really...

There would still be individual stores that do this - home deliveries aren't something new, and remember, as I mentioned every Foodstuffs store is individually owned, it's not a chain store in the usual sense.

In the 80's supermarkets delivering goods was actually very common. People would come into stores, do their shopping, and the supermarket would deliver their goods to them.

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#568725 14-Jan-2012 10:40

sbiddle: as I mentioned every Foodstuffs store is individually owned, it's not a chain store in the usual sense.

I missed that; you posted while I was replying :)

Next time I'm physically at the local NW I'll have a look and see whether there's a "secret" site somewhere. I just found this one but it's rather basic, out of date (the Promotions page lists several that expired six months ago) and certainly doesn't have online ordering.

I may be getting a little off topic here though :)

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#568728 14-Jan-2012 10:47

sbiddle:
gzt:
sbiddle: While there is in effect a doupoly in NZ supermarkets don't let that fool you into a lack of competition. The competition between Progressive and Foodstuffs is extremely intense, something that's not normally the case with a traditional duopoly.

I agree, it works well for most areas. Just not in online shopping. As above, Progressive has offered online shopping (with a slowly increasing list of items) for over 10 years. Foodstuffs, nothing, despite having a choice of three excellent flagship brands they could use for the purpose.

Foodstuffs are a co-operative with 3 different companies in NZ (South Island, lower NI and upper NI). All stores are individually owned, something that isn't the case with Progressive, or any major Australian or UK supermarket chains.

Good point. I was unaware of the scope of that. In contrast their distribution ownership is fairly concentrated but they may have internal sensitivities about using one of their existing brands in competition with local owners. It does not preclude creation of a new brand for the purpose though, this is only the same way their own New World owners compete with their own Four Square owners.

However, it does mean outside investment (or investment from a single owner or group of owners) is required to get things started.

My guess on profitability is only just, but paying for itself now, and starting to move firmly into a viable business.

There are plenty of things a smart operator could do with online business to generate additional profit, given the low margins pak-and-save operates on they probably have the smarts to do that from existing experience, and do a better job of it.

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#568764 14-Jan-2012 13:04

Online shopping is something that's been looked at regularly for ~10 years, I know because I had some personal involvement with it.

At the end of the day every time it's reviewed (at least up until 2 years ago) the business case simply never got close to stacking up. The logistics of having an online ordering system where stores are free to set their own pricing for goods is a fundamental issue also. Prices for fresh food products at your local NW store are set by the store (with some guidance from Foodstuffs) and will vary from store to store. Progressive set the price fior every single product in store at their head office, and that's the price it's sold for.

Foodstuffs stores also have the ability to purchase products direct from suppliers, many of whom are small suppliers that don't supply goods to Progressive, this is why you'll typically find the range of goods is better. Because pricing of these goods is all handled by the store there is no way they could be incorporated into an online ordering system without fundamental changes to the entire business model.

sleemanj

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#568824 14-Jan-2012 16:02

Behodar:
gzt: As above, Progressive has offered online shopping (with a slowly increasing list of items) for over 10 years. Foodstuffs, nothing, despite having a choice of three excellent flagship brands they could use for the purpose.

I could've sworn that I've seen New World home delivery vans around the place, but I can't find anything on the NW site! It boggles the mind really...

NW South City operates a van in Christchurch as a bus service, could be that you're thinking of?

http://www.foodstuffs.co.nz/media-centre/news--media/new-world-south-city-establishes-bus-service-for-redcliffs-shoppers

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Ragnor

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#568840 14-Jan-2012 16:37

sbiddle: Online shopping is something that's been looked at regularly for ~10 years, I know because I had some personal involvement with it.

Yes, I know Foodstuffs Wellington were reviewing online shopping again end of last year.

The co-op and independent owner model must make it much more complex, but not impossible.

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