France E.Leclerc to Launch Home Delivery in Paris
French retailer E.Leclerc will launch a grocery home delivery service in Paris, appropriately named "Leclerc Chez Moi" (Leclerc at Home). The service will be launched in late Spring 2018, its CEO unveiled on the BFM TV channel. To convince Parisian shoppers, the retailer also anticipates developing collection points across the French capital city. E.Leclerc is convinced it can undercut competitors prices by 15-20% in what it considers the most expensive city in France. Confident in the technology developed in recent years for its Drives, the retailer is giving itself three years to improve the service and supply chain accordingly.
Gildas Aitamer (Senior Retail Analyst)
Opinion Opportunities and Challenges Ahead
While the CEO of E.Leclerc took aim at Amazon during his annoucement, we believe this latest move is mainly out of concern for its French rivals. Established players have worked on improving services and reducing delivery times, but a price-cutting competitor will be a serious threat, particularly for Casino's upmarket Monoprix. Should E.Leclerc gain ground and heat up competition, it will increase pressure on the bottom line. Auchan's home delivery division, Auchan Direct is reportedly still looking to break even, and it is unlikely to be the only one.
Even so, home delivery providers have refined their supply chain. Auchan Direct for instance recently invested in a brand new fully-automated warehouse in Paris' suburbs to offer delivery within six hours in the Paris area. Further, it significantly increased its online assortment to 17,000 SKUs, to be on par with Monoprix, but this still leaves it well below Houra (Louis Delhaize) and its catalogue of 50,000 SKUs, for example. While E.Leclerc wishes to have the upper hand on prices, it may have to significantly broaden its online offering, ranging up to 9,000 SKUs at its Drives in order to convince Parisians.