Dutch Jumbo Supermarkets and quick commerce company Gorillas will cooperate in the Netherlands and Flanders. They are convinced that they can benefit from each other’s expertise and strengthen their market position. It is even possible that Jumbo will take an equity stake in Gorillas. So why will this be an exciting and instructive collaboration?
Demand for faster deliveries
With the collaboration, Jumbo strengthens its position as the best supermarket in the Netherlands by responding to the rapidly growing need of consumers for fast delivery. If consumers can choose whether they receive their groceries within two days or ten minutes, they will opt for the latter. Jumbo knows that it will lose market share if it does not step in now. The role of the traditional supermarket is not played out, but supermarkets are becoming less critical in the food market.
If the consumer changes, you are faced with the choice to do nothing, then you permanently lose or cooperate to serve that consumer better. Jumbo CEO Frits van Eerd: “In our market, there is a lot of competition for the customer’s favor. You have to earn it. We at Jumbo are working hard to put our customers first, always and everywhere. The step towards super fast delivery is then the correct answer.
Building its own network of local micro-fulfillment warehouses and bicycle couriers for fast delivery would cost Jumbo too much time and money. Gorillas already offers such a network; Jumbo can make a flying start. Online customers of Jumbo will have the option to have their purchases in urban areas delivered by Gorillas within 10 minutes. Jumbo is exploring combining supermarkets and dark stores.
Gorillas can, in turn, benefit from the efficiency of Jumbo as a logistics ‘powerhouse’. Jumbo’s purchasing power and good assortment give Gorillas wings. The winner takes all! Sounds like a perfect marriage, right?
A match made in heaven?
The big question is whether Jumbo and Gorillas also have a ‘cultural match.’ Jumbo is a strong family business with a solid Dutch grocery mentality that takes good care of its staff. Jumbo employees are proud of their company.
The ambitious Gorillas is growing fast with many though challenges. Unlike Jumbo, the burn rate is still high at Gorilla. Previously, their bike couriers complained about poor working conditions and non-payment of salaries. Gorillas is under fire because their rapid advance leads to inconvenience and road accidents. These will be challenging discussions at the boardroom tables.
This collaboration will shake up the food market. So what will Dutch challengers Albert Heijn and Picnic do? Gorillas also has partnerships with national retailers in other markets, such as Tesco in Britain and Casino Group in France. So doing nothing is no longer an option.
Walther Ploos van Amstel.