Following the news that Sainsbury’s has moved into foodservice delivery via its new partnership with Deliveroo, Thomas Brereton, Retail Analyst for GlobalData, a leading data and analytics company, offers his view:

“A growing list of retailers have been forging alliances with foodservice delivery companies. For grocers, there are two short-term benefits: it enables a small but immediate foothold in the growing on-demand foodservice industry and it paves the way for potential expansion beyond foodservice to full food and grocery fulfilment (for small basket sizes).

“However, ceding control over the last-mile has its complications. Customer care sits at the core of Sainsbury’s business strategy, but this partnership puts the most customer-facing side of delivery in the hands of an external organization.

“Moreover, e-commerce giant Amazon recently invested £460m in Deliveroo, and if the deal progresses, it may cause a problematic scenario Sainsbury’s in which it is over-reliant on a competitor. If Amazon decides to significantly increase its presence in the UK food and grocery market, supermarket partnerships with certain foodservice operators are likely to be reviewed and possibly removed.”