Will franchise model help or hinder New World's online ordering?
posted on 8th April 2016
Foodstuffs has announced plans to launch online ordering and home delivery services following trials in its New World stores. The announcement will see the locally-owned business catch up with Australian-owned Countdown, which has offered the service for some time. But an un-named 'industry insider' told the New Zealand Herald that the franchised model used by Foodstuffs made it too difficult to work.
Foodstuffs, which owns the Pak'n'Save, New World, Four Square, Liquorland and Gilmores brands, is New Zealand's biggest supermarket chain.
Read our report on how franchises are handling e-commerce.
Chris Quin, the new Foodstuffs North Island chief executive, said this week that the move was a big step forward for the business and its customers.
Rival Countdown has offered online grocery orders for many years, he acknowledged. But Quin said he expected click-and-collect orders to be a significant market share, whereby customers would order online but collect the goods themselves.
The supermarket chain will use trucks and staff from each store to deliver the goods, rather than contracting the service out, he said.
More than 10 per cent of New Zealand retail sales were now online so he projected big growth. "New Zealand has a growing population and it's getting harder and harder to buy sites, so you can serve more customers," he said, indicating new supermarket development rates might fall as online picks up.
The length of time it had taken Foodstuffs to go ahead with online orders was partly driven by resistance from supermarket owners, the critic claimed.
The online supermarket model was internationally challenging because big scales of business were needed to make home deliveries of food items work to cover the extremely high costs involved, he said.
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