‘Rapid grocery apps face bleak time as cost overtakes delivery speed’

Cost is the biggest concern when it comes to grocery buying rather than speed of delivery, stated a recent report, hinting at downward trend in popularity of rapid online grocery delivery apps in the UK.

NTT DATA surveyed 2,000 grocery shoppers in the UK, focusing on inner city areas where quick commerce is available. It found that just under a third of inner city dwellers use rapid delivery apps/Q-commerce.

However, more than half using the apps are decreasing their use (59 per cent) as cost over convenience becomes more important.

About 92 per cent of consumers state cost is one of the biggest decisions for where and when to purchase their groceries. This is followed by quality with 77 per cent confirming this as a key decision point.

Speed is left far behind with only 17 per cent stating this is a deciding factor on where they buy groceries from.

To attract buyers, rapid delivery apps are offering discounts and big market campaigns. But the outlook for these apps now looks bleak as the cost-of-living crisis continues to grip the nation, NTT DATA argues.

Geoff Lloyd, Director of Retail at NTT DATA UK&I, comments: “As a result of food inflation and the current cost-of-living crisis, consumers are becoming more cost conscious with their purchases and are prioritising this over convenience.

“As a result, fewer consumers are now willing to accept the higher cost that comes with the Q-commerce model, whether it is through higher pricing of products, or additional costs they need to pay for delivery to their doorstep.

“As funding stagnates and introductory offers start to disappear, consumers are likely to decide that the convenience is not worth the cost and will move away from these applications.

“There is a huge opportunity here for legacy retailers and grocers to gain back market share from the Q-commerce challengers and increase sales during this time, as the current economic climate is altering consumer buying behaviour.

“By using data to help improve deals and targeted offers as part of loyalty programmes, supermarkets can gain the upper hand and increase margins during this difficult retail period.”