Convenience retail group BWG, the owner of Mace, Londis and the Irish branch of Spar, said it is looking at the potential rollout of online shopping and home delivery. However, chief executive Leo Crawford warned the cost of delivering groceries must be borne and “nobody has cracked it yet”.
About 44 per cent of franchisees in BWG’s network of more than 1,000 stores provided home delivery services to consumers while they were locked down at the height of the pandemic, and a third introduced call and collect services.
Research conducted by BWG ahead of its tenth annual supplier-retailer “trade show” – which this year is being held virtually over Zoom instead of at its usual venue, Citywest hotel – suggests seven-in-10 of its retailers are interested in maintaining those services after the crisis.
Mr Crawford, whose group also includes the larger Eurospar format, confirmed the company is “examining all options” for home delivery, including implementing its own system or teaming up with a third party delivery service. Services such as Buymie have linked up with supermarkets such as Lidl.
“It is an interesting area to look at. There is a potential pot of gold there for whoever cracks it. We are looking at all options, but it has to make sense for us as a group, and for our retailers,” said Mr Crawford.
“There will be a consumer shift in convenience retailing but it comes with a health warning. The transaction costs are lower in-store. With home delivery, someone has to pick the goods, pack them, and deliver them. A €3 or €5 charge won’t cover those costs, so it will dilute earnings for retailers.”
Grocery retailing has boomed in the pandemic as consumers spend more time at home. BWG’s research showed 73 per cent of its retailers were positive about the future while many are considering expansion. Up to 28 per cent are looking into providing in-store foodservice facilities.
Growth rates
Mr Crawford said Eurospar sales were up 35 per cent at the height of the pandemic, although growth rates for the format had slipped back to about 20 per cent since the economy began reopening: “If you’re in grocery retailing, you’re getting the bounce of the ball.”
Although its retailers, and BWG’s wholesale operation that supplies them, are doing well, BWG also runs a large foodservice division that supplies the crisis-hit catering sector, such as hotels and restaurants.
Mr Crawford said this was down 50 per cent at the height of the crisis but had recently improved to a decline of about 20 per cent. The division’s performance had been cushioned by supplying institutional caterers such as hospitals, which had kept up demand.
“The food service division might finish the year 10-15 per cent down. And I think that’s not bad,” he said.
Its annual trade show brings together suppliers to pitch to its independent retailers. BWG expects €25 million worth of deals to be done over the two days.
