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Not something I’ve really grapsed

The departures at GoPuff come as the once hot market for ultrafast delivery faces challenges from rising wages, labour shortages and the cost of living crisis.

Rapid delivery companies raised billions of pounds last year as investors piled into the sector, hoping to hook consumers on the convenience of groceries that would arrive in minutes.

Of course, there are many businesses that succeed just fine without tempting me to be a customer. But I’ve never really grasped this idea that it would make sense to have this v fast delivery. The labour content, on what’s likely to be a fiver or tenner’s worth of low margin groceries. How can that ever be made to pay?

Shrug?

29 thoughts on “Not something I’ve really grapsed”

  1. I’ve got this great money-making idea, people come round to your house to tie your shoe laces, I’m forever fed up with tying my own shoelaces, I’m sure my legs are getting longer, feet seem to be further away every year, there’s a great market for people to tie shoelaces… now, the only problem is finding enough people happy to drive to people’s homes to tie their shoe laces and be paid little enough for the project to make money.

  2. The labour content, on what’s likely to be a fiver or tenner’s worth of low margin groceries. How can that ever be made to pay?

    Isn’t that why Amazon and other companies are big on the idea of drone deliveries to your house? Higher capex but much lower opex.

  3. I don’t know about ultrafast, but one-day grocery deliveries are usually much larger in value (the UK has free delivery for £40+). I’ve used quicker delivery services, but only for stuff like televisions where the few quid extra seemed unimportant.

    I could see ultrafast delivery surviving as part of a larger business in a big city: enough wealthy professionals WFH and needing something quick or not wanting to shop around. May be enough to support a product; doubt it’s enough to support a full business.

  4. I guess only in those places where one can’t nip down to Mr Patel and grab a packet of bourbon biscuits and a pint of milk.

    What are they called in the US, bodegas ? Or is that only in NY ?

  5. The business model is based on the observation that many Millennials require instant gratification. They click “buy” and they want it by the door as soon as they put the phone down. If it’s not arrived a couple of hours later they need to get something else. Money doesn’t seem to be an object either even though they profess to be poor. I wonder why.

  6. The typical TV advert running at the moment is: Millennial arrives home, puts key in door, realises “Oh Noes! I forgot to buy milk”. Phones Groceries R Us, puts kettle on, milk arrives. With my grey hair when that happens I pop around the corner to Mr Patel and pay 75p for a pint instead of 25p at sAad, and tell myself not to forget next time.

  7. I can’t fathom why people buy takeaway pizza when you can take one out of the freezer and cook it in the oven in under 15 minutes; yet it has long been a popular business model.

  8. Milton Keynes has a rather splendid fleet of Starship robots that hang around outside local shops waiting for online orders. The shopkeeper loads groceries into the compartment and it trundles off to your front door where you unlock it with the app. Costs pennies to use and much loved by harassed parents, the disabled and housebound, those who don’t like to wander round after dark, and the terminally lazy. They have impeccable road manners and are very polite, talking nicely even when the local youths harass them, although most have realised that any serious abuse is recorded on camera and action is taken if they are damaged. No idea whether they are making any money yet but the numbers seem to be expanding and pretty much every estate with a shop seems to have them now.

  9. Isn’t that why Amazon and other companies are big on the idea of drone deliveries to your house?

    Pure marketing hype. The skies being filled with buzzing airdroids dropping lady-shave bombs into back gardens is a concept that won’t fly. The reality is a little more mundane:

    https://www.theguardian.com/technology/2022/jul/04/amazon-e-cargo-bikes-deliveries-london

    Even that is probably commercial bullshit. I’ve seen it reported that Amazon’s online shopping business runs at a loss and is subsidised by the web services branch of the company. Apparently, competing online store companies are not happy about this.

  10. @Gus: we saw some trundling around in Cambourne. They are/were funded by the Co-op and the County Council as an experiment.

    I wonder whether Teslas might bag a few.

  11. I think a lot of the customers for this sort of thing would like it to be widely known that they use it.

    Is this a Veblen service?

  12. “Andrew M

    I can’t fathom why people buy takeaway pizza when you can take one out of the freezer and cook it in the oven in under 15 minutes; yet it has long been a popular business model.”

    I recall Spud opining during lockdown that Dominoes announcement that they were temporarily reducing the choice range on toppings was sensible as he had never understood the need for a wide range of toppings anyway. People, he claimed, simply didn’t need or want such a wide choice.

    Spud is of course a long established expert in the pizza business having been in the trade for decades and built up a huge successful business – unlike Dominoes.

    Spud then tucked into his Margherita pizza, dreaming of the day he could impose his choice on everyone else.

  13. Am I a weirdo in that I actually enjoy grocery shopping? I’ve never happier than when I have my shopping list in one hand and I’m pushing my trolley around with the other. I even like the self service check out machines.

  14. I’ve got this great money-making idea, people come round to your house to tie your shoe laces . . .

    That could be the plain wrapper for a business called CumPuff.

  15. @Andrew M
    I can’t fathom why people buy takeaway pizza when you can take one out of the freezer and cook it in the oven in under 15 minutes; yet it has long been a popular business model.

    Because frozen pizza tastes like crap on cardboard.

    Full disclosure: I was a purveyor of take out pizza for many years. Yes it is quite lucrative.

  16. On the subject of shoe laces, I haven’t had to tie mine since I started doing triathlons and discovered lock laces.

  17. I talked with a young guy once who said he did DoorDash deliveries. An awful lot of deliveries were fast food meals from McDonalds, Taco Bells, etc. Sometimes even just a Coke. Cheap meals for which the customer also paid the delivery fee and usually a tip.

    I suspect the grocery stores are making the same markup, and the delivery services are charging for the delivery. I’ve never used DoorDash, but when I’ve been to my favorite Vietnamese restaurant they seem to be constantly giving packages to DoorDashers. From the restaurant’s perspective it would appear to be the same revenue per meal but with little need of waiters or dishwashers.

  18. If stoned out millennials want to spend their money on stuff to relieve the munchies, and venture capitalists are happy to lose money subsidising their lifestyles, who am I to say don’t do it.

  19. Bloke in the Fourth Reich

    The convenience store landscape is especially poor here. I fantasize about setting up a Tokyo-style 7-11. With a Milton Keynes delivery bot.

    Here in the Fourth Reich, where shopping is banned on Sunday because, according to the churches, it makes Baby Jesus kill even more kittens than when Richie masturbates, and according to the unions eVerYONe mUsT TAke exACt saMe dAY ofF WorK), some entrepreneurs are setting up vending machines with essential groceries, of superior quality to the stuff that can be found in petrol stations.

    The churches and trade unions have not yet called for legislation banning vending machine use on Sunday.

  20. When I lived in Hong Kong if I fancied a cup of tea at 11pm and I’d run out of milk I’d go down the road to Praya Shop. And if Mr Chen had gone to bed early, a bit further to the Park’n’Shop. And if they’d closed early, round the corner to the 7-11. And if they were closed, by then the typhoon would have blown me into the harbour, so it would no longer be a problem.

    Missing the old place and wasting the afternoon StreetViewing around Yau Tong? Me?

  21. @ TD

    Not sure it works like that (same revenue per meal).

    One of our local restaurateurs tells me that Deliveroo (and probably the others) double dip by not only charging the end customer and also a outrageous 30% to the restaurant. He says he sucks it up because customers expect to be able to order online and some money is better than none.

  22. @Gus
    those who don’t like to wander round after dark

    That’s most sensible people in Milton Keynes.

  23. Out here the labor is usually working for tips and a small stipend for mileage – good pay if you can get 3 orders an hour in the city, not so much if you get one out in the county. You use your own car and are on your own insurance.

    Walmart charges an additional 8 bucks as a ‘picking fee’ to have the store pick and bag your groceries for their driver to pick up. A couple picks an hour pays the store employees wage with a couple bucks left over for the company.

  24. Ottokring
    July 22, 2022 at 7:56 am

    I guess only in those places where one can’t nip down to Mr Patel and grab a packet of bourbon biscuits and a pint of milk.

    What are they called in the US, bodegas ? Or is that only in NY ?

    ‘Convenience stores’ is the generic term out here. ‘Bodega’ ‘Tienda’ etc are regional.

    And where I live they rarely have much in the way of groceries beyond tortillas, some condiments, and some microwave meals in the freezer.

  25. BiFR
    When Ilved for a while in Neuss, there were kiosks open on Sundays. Mostly equivalent to a newsagent, but they kept milk and pop in the fridge and a few basic things in packets. I don’t know if this was specific just to that part of NRW or not. Needless to say the only other places in Bavaria and elsewhere were railway or petrol stations.

    Belgium was a bit odd. There were convenience stores there too,open on Sundays which didn’t actually seem to sell anything useful.

  26. Jacques. It seems you are correct, but apparently DoorDash takes a smaller bite than 30%, but a bite nonetheless.

  27. Bloke in the Fourth Reich

    Our local kiosk doesn’t even have pot noodles, but does have beer, sweets, and crisps. They don’t do enough with the square feet.

    jgh,
    You bring tears. CWB was our haunt.
    Hong Kong very haunted now. All of it. Only ghosts left. I hope we can go back some day.

  28. @jgh
    Missing the old place

    What you are missing now is a whole heap of assorted crap. Our newly “elected” Chief Enforcer is a career policeman. ‘Nuff said.

  29. My personal measure of imminent financial collapse is the number of firms offering ‘meals in a box’ with delivery for those too disorganised/rich to supermarket shop (virtually or IRL) like Gousto

    Essentially meal preparation is then an assembly of prepped ingredients in accordance with (inevitably) app instructions

    My occasional viewing of their irritating TV advertisements etc suggests we are now at peak “boxed prepped meals for the indolent”

    Similar companies do the same for pets because opening a can of whiskas is clearly too difficult

    The End of Days approaches..

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