Ultrafast grocery delivery is becoming an increasing threat to the established grocery giants according to JP Morgan, which recommends shorting (sell) Sainsbury’s PLC because of the trend.
“Major changes are about to come in consumer grocery shopping patterns with the impact on the grocers likely to be more severe than we initially thought,” said the US bank, referring to its warning earlier this year about the 'existential threat' to the existing supermarket players.
In a (small) survey of Londoners, JPM found around a third use an ultrafast service once a month and 13% on a weekly basis.
Consumers surveyed also said the prices they were charged seemed fair and on a par with traditional shopping.
“The biggest surprise has been to learn that ultrafast grocery seems to be denting the physical stores more than the online channel of the branded supermarkets thus far.”
JPM said interviews with the new entrants such as Gorillas, ZAPP, and Samokat in Russia had confirmed the rapid growth trends, with ample funding available as shown by recent investments, including Uber rival Bolt, which recently raised €600mln to expand into the grocery market.
The bank's long-term strategy to play the theme is to sell Sainsbury’s (220p target price) and buy Delivery Hero (ETR:DHER, OTCQX:DLVHF) (TP €192).