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E.Leclerc Introduces Urban Pick Up

A member of store owner cooperative E.Leclerc is experimenting with an urban pick up store in Lille (Northern France). Orders are picked from a dedicated warehouse in the suburb which supplies different collection points.  In a note, CEO Michel-Edouard Leclerc said that the assortment will be composed of 12,000 SKUs as well as products from a local organic farmer cooperative.  


Opinion

Little to Lose but Much to Gain

We see this urban pick up location as a low risk opportunity for E.Leclerc to expand its catchment area. Practically a hypermarket-only retailer, Leclerc operates on the edge of towns, meaning little sales cannibalisation. It has already emerged as the heavyweight of Drive grocery click & collect in France. Profitability considerations have made its infrastructure driven toward volume and efficiency. One of the configurations operated is a hub and spoke system, or what the French refer to as a "star-shaped" network – where a number of pick-up locations are supplied by one central fullfilment centre.

Using a hub and spoke system for this new urban pick up location means that the investment for this pilot is extremely limited, beyond the rental cost and the minimum staff needed. However, the benefits could include increasing access to busy urban shoppers, particularly young professionals or those with young families. These city dwellers may be less likely to shop in out of town locations, favouring proximity channels and home delivery. 

An early pilot was already established by home delivery banner Auchan Direct, looking to anchor itself closer to its Parisian clientele whilst reducing the costs of last mile delivery. But this strategy could also allow big-box operators to put a foot in the door, offering competitive pricing vis à vis urban supermarkets and minimarkets, while tapping into the millions of French consumers living in city centres. An attractive perspective indeed, and E.Leclerc is not alone in the segment, Louis Delhaize Cora hypermarket has already been conducting its own pilot in Metz (Eastern France) for a year, which has not been duplicated to date.

Still in the test phase, the key question around these pilots is asked by Michel-Edouard Leclerc himself,  "Will urban consumers, enjoying a dense proximity offering and having little in stock at home, be interested in picking up their own consumer goods, even if it is clearly cheaper?". 



Topics: E. Leclerc