Online grocery services struggle to meet demand

Online grocery services struggle to meet demand
Online food retailer Ocado said that demand had risen 10 times above the normal level, with the website struggling to handle the sudden rise in traffic. (Reuters)
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Updated 07 April 2020

Online grocery services struggle to meet demand

Online grocery services struggle to meet demand
  • The spike in Internet food shopping started before cities imposed lockdown

LONDON: A pandemic forcing everyone to stay home could be the perfect moment for online grocery services. In practice, they’ve been struggling to keep up with a surge in orders, highlighting their limited ability to respond to an unprecedented onslaught of demand.

After panic buying left store shelves stripped of staples like pasta, canned goods and toilet paper, many shoppers quickly found online grocery delivery slots almost impossible to come by, too.
“It’s kind of becoming more challenging to put a meal together,” said Paul Smyth, a software engineer who lives near Manchester, England, where the online groceries industry is
particularly advanced. He’s a longtime customer of British online-only supermarket Ocado but hasn’t been able to land a slot since he received his last delivery two weeks ago.
The problem for many delivery services is ramping up staff to pick goods in shops and deliver. But for Ocado, a cutting edge service that relies on warehouse robots, significantly increasing deliveries would mean a big investment in new machinery and warehouses too late to catch the spike in demand.
Smyth said he’s starting to run low on meat and frozen goods, but wants to avoid going to a supermarket because he worries his asthma, diabetes and high blood pressure are risk factors if he catches the new coronavirus.
“I won’t be panicking for another week, but if I’ve got to wait another two weeks for a delivery slot it’s going to be very close to the bone.”
The coronavirus crisis is giving the e-commerce industry a boost but troubles at Ocado and other online grocers highlight how hard it is for the industry to quickly scale up online delivery.
In the US, grocery shopping had only been slowly migrating online, making up 3 percent of the food retail market, according to a report last year by Deutsche Bank.
As the crisis hit, delivery orders surged as millions of Americans stayed home. During the week of March 2, even before some cities and states imposed “stay at home” orders, Instacart, Amazon and Walmart grocery delivery sales all jumped by at least two-thirds from the year before, according to Earnest Research. Instacart, a platform that partners with more than 25,000 stores in North America, says orders in more recent weeks have surged 150 percent.
As a result, customers in hard-hit New York City are waiting days to schedule deliveries that usually take just hours. In China, where the outbreak originated early this year, ubiquitous smartphone food apps helped millions get through months of strict lockdown. Even so, e-commerce giant Alibaba’s supermarket chain Freshippo reportedly recruited laid off restaurant workers for temporary staff as more customers shifted to ordering by app and average basket sizes jumped in the first half of February.




Online grocery shopping has become a vital lifeline for at-risk shoppers who have been advised against visiting supermarkets. (Reuters)


Britain’s online grocery market, one of the world’s most advanced, is estimated to account for 8.3 percent of all sales in 2020, according to market research firm Mintel. Nevertheless, Ocado and the online arms of bricks and mortar rivals like Tesco, Sainsbury’s and Walmart owned-Asda were all booked up. To be fair, they’re prioritizing slots for vulnerable customers.
Ocado has pioneered online groceries in the UK since 2002 with automated warehouse robots and has licensed its technology to other companies including Kroger. That experience wasn’t enough when its website melted down after traffic quadrupled.
The company battled to get systems back to normal by taking its smartphone app offline and stopping new account signups.
It temporarily blocked its website, then made all visitors wait in a virtual queue, alienating long-time users.
“It just felt as if they’d completely abandoned customers,” said Smyth, 50, who waited as long as four hours online only to find there were no delivery slots. Ocado now has a new system to allocate slots but Smyth still hasn’t had any luck and is getting by with basic items from a local shop.
CEO Melanie Smith emailed customers to tell them demand spiked to 10 times the normal level. Her message came after Prime Minister Boris Johnson announced new lockdown rules and urged people to use food delivery services.
Every time the British government announces new measures to fight the virus, she said, “we see a further extraordinary surge of customers.”
“No matter how hard we work, we will not have enough capacity to serve the unprecedented levels of demand.”

FASTFACT

343k Ocado handled 343,000 orders per week in the quarter ending March 1, and sales have since doubled.

Ocado operates three warehouses where cube-shaped robots on wheels zip along vast grids, picking up crates of soda, teabags, or apples and delivering them to “picking stations.” There, humans or robot arms put together customer orders to be delivered by a fleet of vans.
The company said it handled 343,000 orders per week in the quarter ending March 1, and sales have since doubled. Analysts note the main factor influencing growth in an automated system like Ocado’s is warehouse capacity.
“There are only so many of those warehouses you can build,” said Simon Bowler, an analyst at Numis Securities. It takes up to two years for Ocado to build a warehouse, so “saying today, we’re going to build a new warehouse, it doesn’t solve the problem here and now.” A fourth warehouse was destroyed by a fire last year.
Traditional supermarkets have their own less sophisticated online operations, using people to pick items off shelves.
That is “a bit easier to flex to sudden huge increases in demand,” said Bowler — you just need to hire more people.
Companies have started doing that. British supermarket Morrison’s is hiring 2,500 extra drivers and pickers. Amazon is looking for 100,000 more staff, while Instacart plans to add 300,000 gig workers, more than doubling the number of people it has picking and delivering groceries.
Still, Instacart’s workers have struggled to meet efficiency targets, as stores impose distancing rules and business surges.
That highlights the main downside to human store pickers, Bowler said: They’re 10-15 percent less cost efficient than robots.


SABIC, BASF discuss plastics circular economy in Riyadh

SABIC, BASF discuss plastics circular economy in Riyadh
Updated 23 June 2021

SABIC, BASF discuss plastics circular economy in Riyadh

SABIC, BASF discuss plastics circular economy in Riyadh
  • SABIC is working with UK-based company Plastic Energy to build its first commercial unit in Geleen
  • Chemicals giant focuses on recycling plastics

RIYADH: SABIC and BASF, two of the world’s largest chemical producers, met in Riyadh to share insights into their respective programs to develop circular economy solutions for the plastics industry.
SABIC shared progress it has made with TRUCIRCLE, a collection of processes that allow for the certification of polymers created through recycling of used and mixed plastic, certified bio-based renewable polymers, certified renewable polycarbonate (PC), and mechanically recycled polymers.
BASF discussed ChemCycling, a project to develop a pyrolysis technology that turns plastic waste into a secondary raw material called pyrolysis oil. The German multinational also explained how its plastic additives facilitate mechanical recycling of plastics.
SABIC is working with UK-based company Plastic Energy to build its first commercial unit in Geleen, The Netherlands, which will produce TRUCIRCLE certified circular polymers from recycled plastic.
“TRUCIRCLE has been introduced as a way to collectively showcase our circular innovations and help manufacturers reduce plastic waste through the adoption of a range of sustainable material solutions,” said Mark Vester, SABIC’ global leader circular economy. “It forms part of our circular economy business and is aligned with the UN Sustainable Development Goal of Responsible Consumption and Production.”


Humvee maker strikes military vehicle deal with Egypt

Humvee maker strikes military vehicle deal with Egypt
Updated 23 June 2021

Humvee maker strikes military vehicle deal with Egypt

Humvee maker strikes military vehicle deal with Egypt
  • The company will study the feasibility of developing an in-country assembly and manufacturing capability to allow Egypt to replace or supplement its existing Humvee fleet

DUBAI: Humvee manufacturer AM General has struck an initial agreement to help develop the production of military vehicles in Egypt.
The deal with the Egyptian Ministry of Military Production is expected to become a long term partnership to develop and build tactical vehicles in-country, the US-based company said in a statement on Wednesday.
The company will study the feasibility of developing an in-country assembly and manufacturing capability to allow Egypt to replace or supplement its existing Humvee fleet.
“Today’s signing ceremony further solidifies our long-standing relationship with the government of Egypt,” said AM General President CEO Andy Hove. “We look forward to applying our manufacturing and design expertise to help grow the Egyptian automotive industry.”
The agreement is part of a broader push to develop more domestic military manufacturing in Egypt which is already a major defense sector importer. Arab states are ramping up spending on local defense sector investments as part of their economic diversification agendas which aim to create more local jobs while at the same time substituting value-added imports with locally manufactured alternatives.


Oman to grant foreign investors 10-year residency

Oman to grant foreign investors 10-year residency
Updated 23 June 2021

Oman to grant foreign investors 10-year residency

Oman to grant foreign investors 10-year residency
  • Program is open to foreign retirees

RIYADH: Oman has announced a new program under which foreign investors are granted long-term residency, Asharq reported citing a statement by the Ministry of Commerce, Industry and Investment Promotion.

The Investor Residence program will be for a period of five to 10 years, subject to renewal, and is open to foreign retirees, the ministry said.

The program, starting in September, aims to attract quality investments according to clear and specific controls.


Abu Dhabi commissions solar farm in West Africa’s Togo

Abu Dhabi commissions solar farm in West Africa’s Togo
Updated 23 June 2021

Abu Dhabi commissions solar farm in West Africa’s Togo

Abu Dhabi commissions solar farm in West Africa’s Togo
  • The Mohamed Bin Zayed Solar PV Complex is expected to power around 158,000 homes and businesses in the country

DUBAI: An Abu Dhabi-funded solar plant in Togo, West Africa is now fully operational, state news agency WAM reported.

The Mohamed Bin Zayed Solar PV Complex, a 50-MW project financed by the Abu Dhabi Fund for Development (ADFD), is expected to power around 158,000 homes and businesses in the country.

The country’s first solar plant is located in Blitta, Togo, and spans around 92 hectares in the African nation’s Centrales region.

The new clean energy source will reduce the community’s reliance on firewood and charcoal, and aid Togo’s national agenda to increase renewable energy share by 50 percent by 2025, and to double it by 2030.

ADFD provided 55 million dirhams ($15 million) in concessionary loans to finance the project, which was developed by Amea Togo Solar, a subsidiary of the UAE-based clean energy developer Amea Power.

The funding is part of ADFD’s joint facility with the International Renewable Energy Agency (IRENA), where the pair vows to support the development of renewable energy projects around the world.

“Africa holds tremendous promise for renewable power generation, which can bring improved energy access and reliability of supply while creating jobs and economic opportunity,” IRENA’s Director-General Francesco La Camera said.

In 2020, ADFD and IRENA signed loan agreements worth 121 million dirhams with the governments of Togo, Niger, and Liberia to advance clean energy in Africa.


Egypt to implement eighth increase in household electricity prices in July

Egypt to implement eighth increase in household electricity prices in July
Updated 23 June 2021

Egypt to implement eighth increase in household electricity prices in July

Egypt to implement eighth increase in household electricity prices in July
  • Prices will increase between 8 percent and 26 percent
  • Subsidies phase out extended from 2021/2 to 2024//5

RIYADH: Egypt’s Ministry of Electricity and Renewable Energy is preparing to the eighth increase in electricity prices for domestic consumption since it began phasing out subsidies in 2014.

From July 1, prices will increase between 8 percent and 26 percent, depending on the consumption segment, Minister of Electricity Mohamed Shaker said in an interview on Al-Balad TV.

In 2014, a decision was taken to eliminate state subsidies within five years, which was subsequently extended earlier this month to eight years to reduce the burden on customers and will now end in the fiscal year 2024/5, he said.

“When the economic reform took place in 2016, the dollar exchange rate changed dramatically, jumping from 7 Egyptian pounds to 18 Egyptian pounds, and this turned the scales completely,” said Shaker.

Fuel affects the cost of electric power the most, and whenever the dollar exchange rate changes, the fuel prices change, he said.