The boss of Dundee-based delivery app Snappy Shopper says local corner shops risk going out of business at the hands of so-called “dark stores” fulfilling orders for major competitors like Deliveroo.
Mike Callachan, chief executive of the hit application, says the dark units – which aren’t shops, but merely warehouses delivering groceries for apps like JustEat, Deliveroo and Gorillas – could make local convenience stores a thing of the past unless people support them.
He told insider.co.uk : “People still want the convenience of deliver now, but want to support the high street shop. If they [dark stores] win, there’s a significant threat to convenience stores’ existence.”
Snappy Shopper launched in Dundee in 2017, teaming up with local corner shops across Tayside to fulfil orders made via a mobile app for groceries and even alcohol. Because orders are made and delivered by the company from local convenience stores under banners including Premier, Family Shopper and Co-op, people who buy through the app are also supporting their local businesses.
Callachan launched the app after teaming up with Spar franchisee Scott Campbell to help busy locals stay on top of their top-up shops, while ensuring the stores stayed afloat too. The company became a huge success story during the coronavirus pandemic, when it reported a 534% rise in orders five weeks after March 2020.
(Image: Ayrshire Post)
Do you still support your local corner shop? Share your views in the comments.
By the end of 2020, the app went from supporting nine shops, doing around £100,000 in turnover, to 650 shops, turning over £3m per month. It now works with 1,300 convenience stores across the country and has just fulfilled its five-millionth order.
But it remains proudly local. Snappy Shopper is based at Dundee City Quay, where hundreds of locally employed people work to keep the app’s expansion going.
The rise of apps such as UberEats offering grocery delivery services alongside takeaways, however, is leading to a growth in “dark stores” – dedicated warehouses stacked with groceries, ready to be delivered at the tap of a button, with no shop assistants or storefronts required.
But convenience stores reportedly prefer Snappy Shopper’s more competitive service fees. Bigger firms charge small businesses as much as 25% per order, meaning small businesses don’t actually make any money on the order at all.
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Callachan said of the app’s success: “The orders came flying in that first weekend and shop sales doubled, immediately making Scott’s shops profitable, while gaining him a new customer base of those who found it harder to pop in.”
The business boss wants people to continue using convenience stores in any way they can, despite the allure of apps like Amazon promising just about any item conceivable at a knock-down price.
He added: “I don’t like the instinct, but I’m guilty of it too – where I would have usually went to the local shop to get new batteries, now I’ll just order them on Amazon, so its more missed revenue for the retailers.
“Being able to say we’re the only app to sell the on-the-shelf-price is a good message right now, and we’re still making money while the customer gets a fair price.”
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