Business

Online grocery market expansion likely to be lasting legacy of crisis

An Irish equivalent of Ocado could be one legacy of the coronavirus pandemic

Online grocery shopping services are now of extreme importance. Photograph: iStock

Thu Mar 19 2020 - 06:20

One of the few stocks defying gravity these days is, unsurprisingly, Ocado Group, the British online grocery provider. In the sea of red tickers on stock exchange boards, Ocado's has been conspicuously green. Yesterday's climb of 8.7 per cent, as most stocks tanked again, was the latest in a string of similar performances. There are no prizes for guessing why.

Anybody who visits Ocado’s site these days will be met with a message telling them they are in a virtual queue, and not to close or refresh the page: “You are position 19,209 of 20,193. Your wait time will be more than two hours.”

The company is not at present taking on new customers, and even existing ones are finding there are no delivery slots available for days. If only to improve the morale of customer number 19,210 by the merest smidge, it was time to swiftly exit that queue: Ocado doesn't serve the Republic (or indeed Northern Ireland or Scotland).

Right now the waits for online delivery slots for supermarkets in Ireland are also long, and there are pleas on social media for people to leave online shopping slots to those that need them most: shoppers who are vulnerable to the most severe forms of Covid-19 and people who are unable to shop in person in normal times.

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Although there are companies in this space, such as the Dublin outfit Buymie, Ireland does not yet have a specialist online grocery operation on the scale of Ocado. Margins in such delivery activities have been tight, profits scarce. For the supermarkets that do it, such as Tesco and Supervalu, it has so far been a small part of their overall business.

Now every retailer and retail partner is frantically trying to increase their capacity in response to the Covid-19 emergency. In the short term it will be impossible to do so as fast as consumers want and need at a frightening time. One legacy of this pandemic may be a lasting expansion of and innovation in home delivery services, with Irish Ocados springing up to cater for demand.

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