Leclerc has begun piloting its drive-through format in Poland with the introduction of 10 outlets and more to follow in Spain and Portugal.
Leclerc is not alone. Many other French players are rolling out the format, as well as Ahold in the Netherlands and the US and Tesco in the UK.
The key driver behind Leclerc’s decision to roll out the model internationally is its recent sales performance. Last financial year, the 446 Leclerc drive outlets posted a 63% sales rise to €1.47bn (£1.2bn). Leclerc opened 175 drive locations in 2013 to cater to growing demand.
It also launched a pilot of a drive concept at a motorway service station that is likely to be rolled out more widely. That may be a prerequisite to trials of collection at third-party locations – arguably the next phase in the evolution of grocery click-and- collect. It is already happening in the UK and is likely to be seen in other Western European countries.
So why are retailers rolling out the drive format? The three reasons are consumer demand, profitability and typically limited capex required to launch. First, the increase in online food sales and consumers’ increasingly fast-paced lifestyles will provide continuing demand. Second, with the average home delivery order in Western Europe costing €15 (£12.30) to fulfil and order fees typically much less, the model provides a means to improve the profitability of food ecommerce.
Food home delivery is expensive because of the need for temperature-controlled delivery vehicles, short delivery windows and the cost of employing pickers at stores overnight. It is a labour-intensive business which is not proven to be profitable.
With drive however, a number of these costs – such as delivery vans and their drivers – are no longer present.
Third, many drive formats do not require significant capex because drive-through areas can be constructed adjacent to existing hypermarkets. Retailers typically own the site and need to make only minor adjustments.
There are more expensive options – the standalone drive for example – but retailers can choose which type suits a location.
Expect further expansion of grocery click-and-collect services in the years ahead as retailers seek to cater to growing demand as well as improve their bottom lines.
- David Gray, retail analyst at Planet Retail
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