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Online Grocery: The Strategic Challenge for Europe’s Quick-Commerce Business Model

Start-ups that deliver groceries in minutes might need a lot longer to make a profit.

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Online Grocery: The Strategic Challenge for Europe’s Quick-Commerce Business Model
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Billions of euros have been invested in quick-commerce grocery services that deliver items to urban customers in 15 minutes or less. However, these disruptors, particularly prevalent in Europe, face a challenge reaching profitability because they have not yet achieved scale economics, and they require making significant marketing investments to acquire and retain new customers in their launch phases. Their strategic options include: racing to become the sole survivor where they currently operate; entering unclaimed geographies and winning the first-mover advantage; merging with other quick-commerce or food-delivery aggregators; selling out to traditional grocers (if they believe they would win anything doing this); and rapidly broadening deliveries to other (preferably higher-margin and small-pack size) categories such as pharmacy or cosmetics.

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