Zapp, the app that promises to deliver everything from nappies to bananas to your door in less than 20 minutes, is opening a major distribution centre in London as competition in the red-hot grocery delivery sector continues to heat up.
The London-headquarter company is opening its first centralised stock hub to help drive down costs and protect it from the ongoing supply chain chaos that is causing havoc for even some of the biggest supermarkets. Zapp has signed for 25,085 sq ft of space in Park Royal in West London.
Zapp lets customers order hundreds of different items for home delivery, promising to get them to you within 20 minutes. To do this, it operates dozens of ‘dark stores’ across the capital — essentially localised stock rooms for delivery drivers. These stores are small and can sometimes run out of goods. The new warehouse will hold thousands of items, allowing Zapp to quickly restock its dark stores without waiting on a third party supplier.
“Sitting beneath the potato chips or their favourite bottle of wine delivered in minutes is this huge supply chain,” Steve O’Hear, Zapp’s vice president of strategy, told the Standard.
O’Hear said the new warehouse would “dramatically reduce” the number of missing items in orders and give the company “a little bit more control over our destiny”. Bulk buying power should drive down costs.
Zapp was only founded last year but has grown rapidly. The company covers all of Zone 1 and 2 in London and much of Zone 3. It has outposts in Manchester, Cambridge, Bristol, Amsterdam and Paris.
Investors have poured $100 million into the start-up amid a frenzied explosion of interest in the space. Christopher North, the former CEO of Amazon in the UK, was an early backer.
Zapp competes with the likes of Tottenham FC sponsor Getir, Gorillas, and Wheezy, all of whom operate dark stores and promise to deliver in as little as 10 minutes. Traditional supermarkets such as Morrisons, Sainsbury’s and Tesco have also partnered with services like UberEats, Amazon and Deliveroo to offer quick delivery options.
Asda today announced plans to extend its one-hour grocery delivery service to more stores after a successful trial this summer. Express delivery will be rolled out to 96 more shops, including the Isle of Dogs and Old Kent Road in London.
Customers can get up to 70 items delivered to their door within 60 minutes, provided they live within three miles of the shops. Delivery incurs a flat fee of £8.50. Asda’s Simon Gregg said the supermarket had seen “significant” demand for the service during its trial over summer “with slots regularly selling out”.
To compete in the hot market, Zapp has launched a splashy marketing campaign that includes turning some London buses Zapp blue, partnering with Chelsea FC, pictured, and sponsoring the Wireless music festival.
“We definitely feel we have the best London reach in terms of this space,” O’Hear said.
Zapp’s “sweet spot” is convenience items such beer, paracetamol, and nappies, he said. The company is planning special stock for Christmas, amid fears that some retailers could run low. O’Hear was tight lipped on specifics but said it could be everything from “last minute Christmas drinks to a pair of scissors to do Christmas wrapping”.
Many retailers have been hit by worker shortages that mean either their business is understaffed, or supplies are slow to arrive due to driver shortages. O’Hear said Zapp was so far unaffected. The company employs all its delivery drivers directly, which makes it less vulnerable to short-term changes in the job market. Zapp has around 2,000 employees, most of them in London.