Just Eat enters grocery delivery market race with Asda deal
Just Eat Takeaway (Just Eat) has waded into the escalating market battle over rapid grocery deliveries, unveiling a tie-up with Asda.
The deal will initially involve deliveries couriered by electric bikes from five Asda stores across the UK from January, featuring over a thousand items with plans to expand throughout the year.
The decision is something of U-turn from the Anglo-Dutch food delivery service, which previously sat out the jostling between Deliveroo and Uber Eats for new arrangements with British supermarkets.
Andrew Kenny, managing director of Just Eat UK, said: “Our tie up with Asda means we can help people access everything from store cupboard essentials to fresh groceries in a matter of minutes.”
Deliveroo has agreed partnerships with Waitrose, Sainsbury’s, Aldi and Morrisons, while Uber Eats has worked with Shell, Asda and Sainsbury’s.
The past year has also seen a flurry of new entrants to the European food delivery market, including fast grocery delivery firms such as Gorillas, Zapp Getir, Weezy and Fancy.
In London, upstart companies have been enticing customers with ultra-low joining costs and promises of 10-minute deliveries.
The capital has since experienced the rapid emergence of dark stores – delivery only shops that are not open to the public.
Asda is the fourth biggest supermarket chain in the UK, and was acquired by the billionaire Issa brothers from Walmart a debt-fuelled £6.8bn deal in February this year.
The new owners opted to cash in on Asda’s own home delivery network, which included 2,000 delivery vans, selling its logistics business and warehouses in a £1.7bn sale and lease-back deal.
Since then, the supermarket has been exploring its own fast delivery options.
Simon Gregg, vice president of online grocery at Asda added: “Through working with Just Eat we’re able to give customers in new locations the opportunity to select from a broad range of grocery items for speedy delivery to the doorstep. The trial will also see Asda become more accessible to a wider customer base through Just Eats’ significant presence in the on-demand food delivery space.”
Previously, Just Eat expressed concerns over expanding into grocery logistics comes with chief executive Mr Groen questioning the viability of rival services.
The company launched grocery delivery services in Germany earlier this year, but Groen expects the operation to be “profit neutral” – raising doubts over whether the sector can make money.
He also warned groceries offer “no margins” and would be a “distraction” for the wider business.
Just Eat’s shares have fallen by around 50 per cent this year amid heavy spending to fend off competition across Europe.
The company also left the FTSE 100 earlier this year after it opted for a dual-listing in Amsterdam.