(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.
The two companies have already collaborated to let Deliveroo customers order goods from Morrison’s supermarkets. However, the new offering will allow Deliveroo to fulfill orders made on its app directly from a small urban warehouse in as fast as 10 minutes, the companies said in a statement, confirming an earlier Bloomberg report.
The initial rollout of the “Deliveroo Hop” service will offer users in London a choice of as many as 2,000 products, and will operate alongside Deliveroo’s existing partnerships with more than 4,600 grocery stores across the U.K. The new service will help Deliveroo compete with the spate of grocery startups expanding across the U.K. capital, including Zapp and Getir.
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 minutes.
It’s a further step for Morrison, which has been dramatically expanding its online business in recent years. The grocer now sells products on its own website as well as through partnerships with Amazon.com Inc. and Deliveroo.
Other major delivery companies are also investing in the micro-fulfillment center 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.
Read more: Delivery Hero Said to Invest in Gorillas at $3 Billion Value
Grocery is a growing part of London-based Deliveroo’s business, accounting for 7% of total transaction value in the first half. Deliveroo Chief Executive Officer Will Shu has said he sees opportunities for the company to expand into “micro-fulfillment” warehouses in urban areas, and last month it said it hired Amazon.com Inc.’s supply chain executive Devesh Mishra to oversee its technology and product businesses.
(Updates throughout with details from statement)
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