Why 10 mins grocery delivery businesses will die?

Why instant grocery delivery services are shutting down? Here are the reasons:

The days of seeking growth at all costs are over. Investors now demand operational profitability or at least a clear path to it. Simply presenting user growth numbers on a spreadsheet is no longer enough to secure funding, as operational revenue and margins are now critical factors.

The grocery industry's profit margins are razor-thin (7-12% of order value), and the cost to deliver orders leaves little room for profitability. Low average order values (40 items or less) compound the problem.

Unfortunately, the average order size has not increased enough to address the above issues. While top-up grocery services are convenient, they cannot compete with monthly grocery orders, which are far more profitable.

While white-labeled grocery products could potentially boost margins, they have not yet been widely adopted. If grocery delivery platforms introduce private label branded products and capture a substantial market share, this could help improve margins.

Finally, delivery partner costs have increased due to rising fuel prices and inflation. Hourly earnings have gone up, but the margin per order has not, putting additional pressure on the business model ( https://www.yourretailcoach.in/business-model-development/ ).

Going forward, quick grocery delivery apps will need to focus on building a sustainable business model ( https://www.yourretailcoach.in/sustainable-ecommerce/ ). Some potential strategies to achieve this include:

1. Implementing surge fees for instant grocery delivery.
2. Adopting a milk run model, where one pickup can be used for multiple deliveries.
3. Offering discounts for larger average order values.
4. Running whitelabeled product experiments on the app homepage.

About YRC:
YRC offers expertise in supermarket SOPs ( https://www.yourretailcoach.in/sop-standard-operating-procedures-for-retail-store-management/ ), focusing on every department, from the back office to the front office. YRC specialises in strategising supermarket business plans, with a focus on SOPs, as they are essential for an organisation or business to flourish.

To know more about grocery delivery business, refer the following video:
https://www.youtube.com/watch?v=Gh89FFLEAhs&t=104s

YourRetailCoach
Pune, India-411016
Phone: +91-9860-426-700
Email: consult@mindamend.net
Empowering Retail & E-commerce businesses worldwide.

YRC is a Management Consulting Firm with its presence across India & Dubai.

This release was published on openPR.