Dive Brief:
- Coborn's is scaling back its CobornsDelivers grocery delivery at most of its Twin Cities locations to focus on curbside pickup service, according to a company press release. The grocer operates 62 stores across Minnesota, North Dakota, South Dakota and Wisconsin under banners including Coborn's, Cash Wise, Marketplace Foods and Hornbacher's.
- Coborn's will transition its home delivery business in the Twin Cities area to Cub Foods, which will begin serving CobornsDelivers customers next week. Shoppers who visit the service's webpage will be redirected to shop.cub.com. First-time users will get $20 off their delivery order. Coborn's will continue home delivery for select Minnesota locations and for some Cash Wise customers in Owatonna, Fargo and Bismarck, North Dakota.
- CobornsDelivers has operated in the Twin Cities since 2008, when the company purchased SimonDelivers to build out its grocery delivery and rebranded it under Coborn's.
Dive Insight:
Coborn’s decision is a testament to how challenging delivery logistics can be, particularly for a smaller grocery chain operating its own service. By scaling back on home delivery, Coborn's can optimize its click-and-collect service and invest more money in stores, which are its core assets.
On first look, the move to shift its delivery business to Cub Foods is surprising, but Emily Coborn told the Minneapolis/St. Paul Business Journal that the two companies have a long-standing business relationship. United Natural Foods owns Cub Foods, and has also been Coborn's wholesale partner for 20 years, the Business Journal reported.
The Twin Cities area is a crowded grocery market, with retailers including Whole Foods, Lunds & Byerlys, Trader Joe’s, Kowalski’s Market and Fresh Thyme Farmers Market jockeying for market share. Coborn's was a bit of a pioneer for grocery delivery, but the proliferation of the service among grocers has stiffened competition. Amazon Prime began offering Prime Now delivery at Whole Foods stores in the Twin Cities area in 2018, while Instacart offers delivery from a variety of stores including Fresh Thyme, Aldi, Costco and Lunds & Byerlys.
Urban shoppers are the biggest driver of online grocery, with 90% more likely than an average shopper to value a grocer's digital capabilities, according to Acosta. The popularity of digital channels in metropolitan areas is great for grocers that have a strong e-commerce offering, but it also means that multiple grocers are targeting the same segment of consumers.
Click-and-collect continues to gain traction with shoppers, and the service is also a more cost-effective and efficient option for grocers since it leverages their existing stores and, oftentimes, their existing workforce. Coborn's clearly sees the value in expanding click-and-collect to serve more shoppers in more states rather than allocating most of its resources to grocery delivery in a saturated market.
