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We all know that we basically have two ways to get groceries: schlep to the supermarket/c-store or order on-line and have it delivered (if you are lucky enough to live in such an area and can make it home for the delivery). What if we could order groceries on line, then pick them up at our convenience? Well, the French already have that option-Chronodrive.
According to the Wall Street Journal, traditional online grocery shopping wasn't working in France—prices were about 15% higher than at traditional stores—a bigger premium than in the U.S. and Britain. Delivery times, usually limited to working hours, were inconvenient, and costs were high—home-delivery fees are about €12, or $17—not feasible in a country where it is more common for people to pick up groceries several times a week, rather than loading up once a week as is typical in the U.S.
French retail executives Martin Toulemonde and Ludovic Duprez knew consumers wanted a way to save time shopping without the high costs of delivery.
"The price for home delivery doesn't cover costs, so product prices are more expensive," said Mr. Toulemonde. And these days, shopping is seen as a chore. "There are many other things to do in life rather than fill a shopping basket," he said.
The pair founded Chronodrive in 2002, bringing in privately owned French supermarket chain Groupe Auchan as majority investor in order to get the bargaining power of a major grocery chain and keep prices competitive. Auchan doesn't disclose Chronodrive's sales or profit. Chronodrive says its operating margin is comparable to that of supermarkets, which was 3.3% at Auchan in 2008.
The group opened its first store on the outskirts of Lille, in northern France, in 2004. They chose a suburban neighborhood near main thoroughfares with a high number of middle-class families with cars—the ideal consumer who does a lot of grocery shopping but is short on time. The company aims to expand to 32 outlets by the end of 2010.
Many major French retailers are developing competing versions. E. Leclerc counts more than 30 pick-up sites for online orders, and Casino Guichard-Perrachon SA debuted its first four locations at the end of last year—though both have pickup sites at active retail stores instead of the dedicated warehouses Chronodrive uses. French retail giant Carrefour SA is testing a drive-through attached to its e-commerce warehouse north of Paris, as is Asda.
Auchan, meanwhile, has also opened drive-through supermarkets under its own name in Spain and Italy.
In the U.S., Sears Holding Corp. opened its first MyGofer drive-through store in Illinois in May.Wal-Mart Stores Inc. lets customers buy anything except groceries online and pick up their orders in the store for no fee. The company, which recently revamped its grocery site, is studying the drive-through model for food, and is putting smaller stores in inner city neighborhoods to capture new and under-served customers.
FreshDirect, of course, offers a direct delivery model in New York City, where density for delivery operations makes sense. For the other 95% of the non-city US, a Chronodrive-type model would make a lot of sense. I could order tomorrow's food tonight and pick up when I wanted. Oh well, no one has ever designated North American grocery retailers as world-class innovators.
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