(Bloomberg) — Deliveroo Plc is expanding its partnership with U.K. grocery chain Wm Morrison Supermarkets Plc, testing a mini-fulfillment center in London to offer rapid delivery of essential items, according to a person familiar with the matter.
The two companies have already collaborated to let Deliveroo customers order goods from Morrison’s supermarkets. However, the new test will allow Deliveroo to fulfill orders directly from a small urban warehouse for even faster delivery, the person said, asking for anonymity because the plans are private.
A representative for Morrison declined to comment. A representative for Deliveroo didn’t immediately respond to a request for comment outside of regular business hours.
Morrison’s has been dramatically expanding its online business in recent years and sells products on its own website as well as through partnerships with Amazon.com Inc. and Deliveroo.
Grocery delivery surged during the pandemic, and venture capitalists have been pouring billions of dollars into startups that operate “dark stores” in cities to offer a smaller selection of items delivered to the door in less than 15 minutes.
Major delivery companies are also investing in the model, with DoorDash Inc. and Delivery Hero SE set to fund startups Flink SE and Gorillas Technologies GmbH, respectively. Some of Europe’s largest grocery chains are also entering the sector, with Carrefour SA funding French startup Cajoo and German supermarket operator REWE Group partnering with Flink.
Grocery is a growing part of London-based Deliveroo’s business, accounting for 7% of total transaction value in the first half. While giving an overview of the company’s latest financial report, Deliveroo Chief Executive Officer Will Shu said he saw some benefits in the micro-fulfillment center model, such as inventory management.
Read more: Delivery Hero Said to Invest in Gorillas at $3 Billion Value
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