Ocado Group CEO Tim Steiner has said he doesn’t think the rapid grocery delivery market will ever be as large as the big basket market.
Questioned on whether the supermarket still needed its Ocado Zoom quick commerce service after several rivals, such as Getir and Gorillas, have pulled out of the market, Steiner said he thought there was still a “demand for ultra-fast services”.
However, he pointed out that delivering a quick delivery service came at “a price premium in the same way small supermarket type services, forecourts and convenience stores all come at a price premium to hypermarkets,” and were therefore “not the main channel in UK grocery”.
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Commenting on the grocer’s Zoom service, he said: “I think it’s got an interesting future, I just don’t think that immediacy premium market will ever be as large as the big basket market.”
However, he noted that he was “pleased” Ocado was in the market, since it was “learning and continuing to improve”.
The comments come as Ocado narrowed its half-year losses in its latest results, as it capitalised on more shoppers choosing to order their groceries online.
The grocery technology giant’s loss before tax almost halved to £153.9m in the 26 weeks to 2 June, compared to the £289.5m loss the year before, as sales rose 12.6% to £1.54bn.
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