Woolworths ramps up rapid delivery rollout with surge in new ‘Metro60’ stores
Groceries giant Woolworths is ramping up the roll-out of its rapid delivery service, Metro60, with tens of new stores coming online in Sydney each week and fresh plans to bring the service to Melbourne within months.
The push by Woolworths into rapid deliveries of groceries in under one hour through a partnership with Uber will place further pressure on pioneering start-ups in the sector such as Milkrun and Voly, which have both recently hit challenges.
The Sydney Morning Herald and The Age first revealed Woolworths’ entry into the quick delivery market last month, along with major changes at Milkrun and struggles and store closures at competitor Voly.
Woolworths’ chief transformation officer, Von Ingram, who is the senior executive overseeing the Metro60 project, told this masthead that the chain was monitoring key numbers like delivery times, repeat traffic and average order sizes closely as it calibrates its expansion.
Those figures will determine the profitability or otherwise of the Metro60 project, which lets customers order groceries from Woolworths Metro stores from a dedicated app that are then delivered in less than an hour via Uber couriers.
“We want to make sure that we get the economics right,” Ingram said. “Victoria is absolutely, absolutely next, but we take this quarter by quarter.”
So far, Metro60 operates in a zone roughly between Sydney city, Mascot, Matraville and Rose Bay.
Woolworths’ next quarter starts in October, though Ingram emphasised that a launch was not guaranteed. She gave Metro60 a seven out of 10 for overall success so far in the short time it has been operating but would not reveal supporting data on revenue, orders or profitability.
“One of the things that we’re seeing is that customers are repeatedly using the service,” Ingram said. “So they’re not just one and done, they’re actually coming back. So that gives us a little bit of confidence that we’re on to … the right things.”
Unlike Milkrun, which employs a fleet of couriers, Woolworths has contracted the deliveries to Uber drivers. Milkrun boss Dany Milham did not respond to a request for comment but has previously questioned whether Woolworths would be able to meet its delivery target during peak times without a guaranteed supply of couriers.
Asked whether Metro60 was always hitting its promised delivery window, Ingram said: “No, because we’re a young business and we’re learning our way into it. But actually for the vast majority of orders we have made that 60-minute delivery and it’s something that we will continue to focus on actually very carefully as we go forward.”
The recent leak of the Uber Files, a collection of thousands of damaging leaked documents, and a promise from federal Labor to regulate the gig economy has put renewed attention on Uber’s business practises. In response Uber has emphasised that it has turned over a new leaf.
Ingram said Woolworths was committed to its partnership with Uber but regularly worked with suppliers to review pay arrangements.
Coles would not comment on Woolworths’ offering, but a spokeswoman said it was seeing growing demand for online grocery shopping, which it was addressing via a pilot of drone deliveries in Canberra, same-day home delivery, 90-minute pickups and a membership program.
Extracted from The Sydney Morning Herald
