Carrefour expands Spanish home delivery business

Related tags Tesco Carrefour

A five-fold increase in the number of daily orders has prompted
Carrefour to invest in new facilities for its home delivery
business in Spain. But the unit is yet to make a profit, and
persuading consumers outside of Madrid to buy their food online may
be a lengthy task.

Carrefouronline, the online supermarket business operated by the Spanish arm of the French retail leader, has expanded its distribution platform in order to meet a sharp increase in demand.

The company said that during the last six months it had seen the number of orders received every day increase by five to nearly 60,000 sales units a day in Madrid alone, and that as a result it was necessary to step up its distribution network.

The first step was the creation of a new logistics platform for food and drink products, based in the Madrid suburb of San Agustin de Guadalix. The warehouse facility has a maximum capacity of 250,000 units a day and will be run by the Tibbett & Britten group.

The 10,000 square metre facility contains 23 loading bays, 21 of which are refrigerated, in addition to 50 lorries which distribute the food to customers' homes.

Carrefour has big plans for its online shopping business - including bringing into the black for the first time this year - and increasing its share of what is as yet a small market in Spain. But the investment will be worth it, as the average customer order is around four times greater than made in-store.

However, the online shopping market in Spain is by no means guaranteed a rosy future, as Carrefour's main rival Auchan showed earlier in the year with the closure​ of its Alcampodirect business. At the time, the company said that "the development of e-commerce in Spain is slower than had been anticipated"​ and that "both growth potential and profit opportunities remain too weak and unstable to justify retaining the business"​.

Alcampo's business was also based mainly in Madrid, and the suggestion is therefore that both it and Carrefour were fighting for the small slice of the food retail pie there. While Carrefour seems to have won that battle, and is confident of further growth in the future, presumably in other major Spanish cities, it is still to make a profit from its online business. Despite the company's optimism, and investment in new facilities, it could still be some time before home delivery reaches the same levels as it has in the UK, where both Tesco and Sainsbury have well-established and successful operations.

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