Coles boss Steven Cain launches 60 minute click & collect grocery service

Chief executive Steven Cain believes its new 60-minute delivery windows are the ‘sweet spot’ following the collapse of instant grocery apps like Voly and Send.

Coles boss Steven Cain believes online grocery delivery times of 60 minutes is the “sweet spot” for the sector that stacks up economically for retailers, as instant grocery players that have tried to beat that time such as Send and Voly have collapsed and others are pulling back on their service offering.

Mr Cain, unveiling on Wednesday a “Rapid” click and collect service that has cut delivery times by 30 minutes to 60 minutes for Coles shoppers, said there was a demand for fast grocery delivery times from shoppers, but this had to be tempered by making the service profitable.

“Worldwide what we are seeing is there is a demand for ‘fast’ and what we are seeing is different pricing models emerging, either you pay more for the product or you pay a delivery charge, I think everyone is still exploring what the right model is.

“We have seen over here some of the immediacy (instant) providers hit by I think, tough times, because the thing we have seen worldwide we saw people going down that 15 minute and even 30 minute route – and it doesn’t seem to me economically viable at the moment and so we think an hour right now is the sweet spot in terms of working for us but working for customers as well.

“There are very few people who have made 15 minutes (delivery) work worldwide.”

Coles chief executive Steven Cain has launched a new 60 minute ‘rapid’ click and collect service for the supermarket giant.

The Coles Rapid Click & Collect, which will be rolled out to 400 of its chains, offers pick up in under 60 minutes. Customers can place an order for up to 40 items, with a minimum spend of $30 and a flat fee of $5 for orders to be picked, packed and ready for collection in under 60 minutes between 8:30am and 4:30pm daily.

It comes as other operators, especially start-ups and apps, have tried to break into the nation’s $100bn grocery market by tantalising customers with instant delivery options for their groceries but despite raising tens of millions of dollars in funding from venture capital investors have failed to make a profit.

In May, Send, a grocery delivery app offered grocery deliveries in under 10 minutes to almost 50,000 registered users collapsed into voluntary administration. That was followed by Voly, a grocery delivery app which raised $18m in venture capital funding at the end of last year, which shut its doors in November. Food delivery service Deliveroo shocked its customers and legions of drivers when it also this month announced it was exiting the market.

Mr Cain said offering click and collect in 60 minutes helped make the operation more efficient, tied up less staff and was more viable.

Opening the new Southland Coles store in Melbourne on Wednesday, Mr Cain also said the price of fresh food and groceries, which have been rocketing higher this year as inflationary pressure surges through the economy, has continued to moderate, which should take pressure off household budgets.

Mr Cain said pricing was varying across ranges, but in general had moderated.

“Obviously if the product is in short supply the price goes up, but overall on fresh inflation at the moment, things are moderating at the moment which is good.

“In whole fresh areas we are starting to see moderation of things (prices).”

Mr Cain expects to see moderation of inflation in the first quarter of next year. He said stock levels at his supermarkets were good, despite supply chain disruptions, although stores in Perth could face some challenges due to recent outages of key rail networks between Melbourne and Perth.

“In terms of regions, Perth is going to be the most impacted by any packaged product that has to come over from this side to there.”

Originally published as Coles boss Steven Cain launches 60 minute click & collect grocery service