“Grocery on demand!” Whether it’s the result of COVID lockdown, the age of e-commerce immediacy, better D2C supply chains … or the insatiable appetite for shopping of today’s consumer, grocery on demand is the new London phenomenon. Grocery has never been “obvious” in London. In fact, you could speculate that city dwellers must either eat out or live on M&S Food to Go. The large grocers form a circumspect circle around the inner ring road servicing the inner suburbs, with only their convenience store offerings daring to venture deeper into the capital. No more! Everything from bikes, motorized or man-powered, Smart cars or small vans can be seen zipping through the streets all day, every day, with packages large and small. Indeed, this is not the classic large e-commerce weekly trip, but rather using Smartphones to buy top-up items.

The Food to Go market in London (meals and snacks to either eat now or prepare easily and eat later) contracted by 46% with reduced office working, travel bans and nonessential retail closed before April 12. It is expected to recover to 72% of its 2019 volumes by the end of 2021 (Lumina Intelligence), with some of the shorter-term changes already turning into longer-term opportunities as outdoor socializing becomes the norm. 97% of London’s office workers say they want to return to the office but, of these, 81% only want to do this two or three days a week. (PWC data). So, the pattern is clear “food to go” on office days, “food on demand” on “work from home” days, and this will certainly change London’s grocery landscape. Food to Go players, including Greggs, Costa and Co-op, are continuing to expand in the capital, accompanied by an acceleration in operators’ digital journeys with contactless service, crucial to instilling consumer confidence. Reflecting the increase in socializing in outdoor spaces, the “coffee walk” has become a new phenomenon since March 2020. Operators, including Pret a Manger and Leon, have recognized the British love affair with coffee, developing subscription models around coffee which will drive loyalty and spend in the long term.

However, the real battleground is grocery e-commerce, and with Nielson data putting this as 16% of total grocery spend, there is a lot to go for. The pandemic saw customers ditching the hypermarket in favor of local convenience stores. Now supermarket e-commerce websites are seeing a shift to smaller, innovative sites offering fast delivery. This is epitomized by Gorillas, the German delivery start-up that has taken London by storm, promising grocery order delivery within 10 minutes. Not even a stroll to the corner shop can beat that! The delivery service, offering a full range of groceries delivered from its own distribution hubs at “retail prices,” is operative throughout London with the tagline “faster than you.” Gorillas, which in December 2020 raised $44 million in Series A funding, says it is “on a mission to redefine convenience retail.” Riders are employed directly, avoiding the legal wrangles of self-employment in the gig economy, and are paid £11.50 an hour plus tips.

This is just the latest in a host of ultra-rapid delivery services offering groceries in less than 15 minutes, fulfilled from distribution sites in residential areas. Two former Deliveroo executives launched Dija last month, promising groceries within 10 minutes to customers in South Kensington, Fulham and Hackney. The company will serve customers in more than 20 locations by summer, providing access to around 3 million Londoners. Turkish rapid delivery firm Getir announced its arrival in the U.K. in January, offering a range of groceries to customers in London zones one and two.

The large players are not going to give in easily though, recognizing that online needs the ability to serve a full range of customer missions, with the option of direct to home or pickup at store, same hour, same day or next day. Ocado, one of the key “online only” players in the U.K. market, launched Ocado Zoom as a pilot from a site in west London in 2019. Ocado is now looking to take a further dozen sites, small depots designed to service Zoom, inside the M25 (London’s major ring road) to expand the reach of the service. And they are not alone.

Sainsbury’s on-demand Chop Chop service, which delivers up to 20 items within the hour by bicycle, has been operating in London since 2017 but, through COVID, expanded the service to 20 cities across the U.K., including Birmingham, Cardiff, Manchester, Liverpool and Newcastle. Meanwhile, frozen food specialist Iceland is currently working on its own on-demand service, called Swift.

In addition, third-party delivery apps are appearing to serve this market, including Deliveroo. Before COVID the number of customers buying groceries through these delivery apps was so small that Kantar did not beak it out from the wider e-commerce data. It’s now sizeable enough to be measured, and for the 42 weeks to January 2021, 2.2% of online food shoppers bought groceries on a takeaway platform (Kantar), with 9% of shoppers using on-demand apps in December (IGD). The three main ones are Deliveroo, Uber Eats and Just Eat. Deliveroo has been the prime mover to corner grocery delivery and has partnered with 19 retail players in the grocery space, including Sainsburys, Morrisons, the Co-op, Waitrose, Nisa, Booths, Majestic Wine … and even Harrods. The service is relatively expensive, with £4.00 delivery costs, but it is gaining traction, especially with younger consumers who value the service more for rapid delivery than quality or variety of ­offer.

Localism is a lever being pulled by another new player in the capital, Weezy, that delivers in 15 minutes across southwest, central and east London, and works almost exclusively with local independent stores, local bakeries and cafés, aiming to engender a sense of community.

Sainsburys and the Co-op both offer their own on-demand service though their own websites, plus partner with Deliveroo, in order to leverage pickup and delivery from their physical convenience store locations, in contrast to their own service from larger stores or “dark store” distribution centers.

However, the economics are yet to stand the test of time. Supermarket margins are notoriously thin, having to pay delivery apps commission on each order reduces this further. Viewed holistically, it does help the productivity of C-stores and transfers the problem of last-mile delivery. But whether this phenomenon will become a regular part of London’s shopping habits is yet to be seen.

Christine Cross is an MMR correspondent based in London. She can be reached at christinecross.com.