Source: Uber Eats

Uber Eats has entered the rapid grocery sector with a “new quick-commerce concept” named Uber Eats Market.

Unlike immediate-needs players which deliver from dedicated dark stores, Uber Eats Market has launched in partnership with Iceland, with some of the retailer’s staff dedicated to picking and packing orders in stores for dispatch by Uber couriers.

Uber Eats Market features a range of around 1,000 branded and non-branded items from Iceland, including food cupboard essentials, fresh and frozen meat and poultry, and basic toiletries. Delivery “from store to door” is promised “in as little as 20 minutes”, Uber Eats said.

The service will be available to consumers in the grocery section of the app. The fact items are delivered from an Iceland store is not made obvious beyond the fact they may be Iceland branded.

Three Iceland stores will initially service Uber Eats Market – namely South Bank, Poplar and Walworth Road, all of which are in London. The stores were “specifically selected because they are in densely populated areas”.

Uber Eats UK general manager Matthew Price told The Grocer the launch marked “a new and sustainable approach to quick-commerce”.

“Twenty minutes is impressive. Consumers want reliability and speed, but they’re also mindful of how much they pay. It’s difficult to deliver on those three at the same time in an economically sustainable way,” Price said.

“Some of the consolidation we’re seeing in rapid grocery is evidence of the fact some of the models set up today, while they’re delightful from a consumer point of view, aren’t models that will stand the test of time,” he added.

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Uber Eats worked with Iceland to determine which SKUs would do best on the new platform. The expectation is further Iceland stores in densely populated areas will be added to the service, as well as other retail chains.

“We can work with others on a similar concept,” Price said, adding that he expected the service to scale to other cities across the UK.

The service will be available during the opening hours of the three participating Iceland stores.

Iceland Foods international and wholesale director Justin Addison said: “We’re excited to partner with Uber Eats on this new venture, expanding our online and delivery service offering.

“The speed at which we will be able to deliver customers’ shopping to their doors will be unrivalled and we’re looking forward to seeing this partnership develop.”

Uber Eats’ biggest rival Deliveroo launched its own rapid grocery offering Deliveroo Hop in September last year, served by a small number of dark stores in London. It promises delivery “in as little as 10 minutes”. Hop offers a range of 2,000 items, with Morrisons partnering with Deliveroo to serve as wholesaler for the dark stores, providing branded and own-label goods, including from its The Best and Market Street ranges.

This summer, Deliveroo launched a rapid grocery-as-a-service model, with a partnership with upmarket grocery retailer Supermarket of Dreams. That was followed earlier this month  by Deliveroo Hop launching its first physical grocery store, which allows customers to shop by ordering on digital kiosks or the Deliveroo app, for near-immediate collection.

Like Deliveroo, Uber Eats made its move into grocery during the pandemic, partnering with several supermarkets and convenience retailers to list their stores on its app. Uber also sells its technology to supermarkets, including Tesco, Asda and Sainsbury’s, who use it to manage incoming orders for their own rapid delivery services, and assign them to riders.

On the Uber Eats Market rapid grocery venture, Price added: “This is the model that can balance all of the factors [of rapid grocery]. One thing consumers and the market don’t always see is the unit economics of the [rapid grocery] model. This is one we think balances it all nicely.”