On demand grocery apps red hot as Zapp and Asda expand

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The app, which promises to deliver everything from nappy to bananas to your door in less than 20 minutes, is opening a major delivery center in London as competition in the red-hot grocery delivery sector continues.

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The London-headquartered company is opening its first centralized stock hub to help reduce costs and protect it from the ongoing supply chain chaos that is wreaking havoc even for some of the biggest supermarkets. ZAP has tied up for 25,085 square feet of space at Park Royal, West London.

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Zapp lets customers order hundreds of different items for home delivery, promising to get them to you within 20 minutes. To do this, it operates dozens of ‘dark stores’ across the capital – essentially localized stock rooms for delivery drivers. These stores are small and can sometimes run out of merchandise. The new warehouse will hold thousands of items, allowing Zapp to quickly restock its dark stores without having to wait for a third-party supplier.

ZAP’s New Park Royal Distribution Center

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“It’s a huge supply chain to sit down with potato chips or their favorite bottle of wine delivered in minutes,” Steve O’Hear, Zapp’s vice president of strategy, told the Standard.

O’Hear said the new warehouse will “dramatically reduce” the number of items missing in orders and give the company “a little more control over our fate.” The cost should be less than the bulk purchasing power.

Zapp was founded only last year but it has grown rapidly. The company covers all of London Zones 1 and 2 and most of Zone 3. It has outposts in Manchester, Cambridge, Bristol, Amsterdam and Paris.

Investors have poured $100 million into the start-up amid a frenzied explosion of interest in the space. Christopher North, the former CEO of Amazon in the UK, was an early supporter.

Zap competes with Tottenham FC’s sponsor Getir, Gorilla and Wheezy, all of which operate dark stores and promise to deliver in less than 10 minutes. Traditional supermarkets such as Morrisons, Sainsbury’s and Tesco have also partnered with services such as UberEats, Amazon and Deliveroo to provide quick delivery options.

Asda today announced plans to expand its one-hour grocery delivery service to more stores after a successful trial this summer. Express delivery will be introduced to 96 more stores in London, including the Isle of Dogs and Old Kent Road.

Customers can have up to 70 items delivered to their doorstep within 60 minutes, provided they live within three miles of the stores. There is a flat fee of £8.50 on delivery. Asda’s Simon Gregg said the supermarket had seen “significant” demand for the service during its testing over the summer “with slots selling out regularly”.

To compete in the hot market, Zapp has embarked on a groundbreaking marketing campaign that includes converting some London buses to Zapp Blue, partnering with Chelsea FC to photograph, and sponsor a wireless music festival.

One of Zap’s ‘Dark Stores’

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“We definitely feel we have the best access to London in terms of this location,” O’Hear said.

He said Zap’s “sweet spots” are convenience items like beer, paracetamol and nappies. The company is planning special stock for Christmas amid fears that some retailers may run short. O’Hear took a hard look at the specifics, but said it could be “everything from last minute Christmas drinks to a pair of scissors to do Christmas wrapping”.

Many retailers have been hit by labor shortages, which means either their businesses are short of staff, or supply is slow due to driver shortages. O’Hear said Zapp was unaffected so far. The company employs all of its delivery drivers directly, which makes it less vulnerable to short-term changes in the job market. ZAP has about 2,000 employees, most of whom are based in London.

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