The online-only banner of Louis Delhaize has announced that is has added a new region to its home delivery service. However, customers will initially only be able to receive their orders on two days of the week, Tuesdays and Thursdays, Linéaires newspaper notes. In addition to its home delivery service, Houra offers one click & collect station at its distribution centre. The retailer’s turnover has been stable for several years, standing at approximately EUR80 mn per annum.
This announcement from Houra may seem fairly trivial, but taking a closer look, it becomes obvious that Houra is a special case in the e-commerce market in France. Not only is the banner vastly centred on grocery home delivery, in click & collect dominated France, but it is also doing it profitably. Houra succeeded in tripling its profit between 2012 and 2015 to over EUR3mn, according to the French Tax Office. This is an impressive feat when other e-commerce retailers are more often in the red. Many have opted to jump on the Drive click & collect bandwagon to avoid the costly last mile.
We believe Houra’s edge is its cautious and slow expansion as well as the experience it has gained over its nearly 20 years of operation. The convenience of home delivery and the wide assortment of 50,000 SKUs including live lobsters comes at comparatively high prices, but this premium positioning puts Houra into a niche. Expectations are high and the service must be perfect. To this end, the retailer has invested in truck geolocation in order to deliver as accurate delivery time to shoppers as possible (with 30 minute delivery slots).
We see Houra as an exception operating as it does with a home delivery model, but unfortunately the future looks bleak. As France got caught in the wave of Drive click & collect, grocery home delivery operators have found themselves confined to an urban clientele or shoppers with limited mobility. Already very competitive, this realm is increasingly challenged by price aggressive hypermarket operators trying to venture into city centres with collection points, such as Cora “en ville” concept (one of Houra’s sister companies) or more recently E.Leclerc. Auchan is also experimenting, using its Drive location in Bordeaux as a base for local home delivery.