The days of empty shelves and loo roll shortages seem a distant lockdown memory, but one London-based startup thinks it speaks to a wider problem within the UK’s grocery market.
Startup Bother is on a mission to disrupt the saturated grocery market by offering what it considers to be a convenient and cheaper online alternative.
It is a simple idea: Bother offers next-day delivery on household items that don’t require refrigerating, offering everything from dishwasher tablets to baked beans.
Founder Doug Morton’s plan to expand across the UK is ambitious, particularly with Amazon moving into the space. But with support from investors who have previously backed Deliveroo and Just Eat, there is clearly a gap in the market.
The grocery sector ‘hasn’t changed since the 60s’
Doug Morton jumped on the growing demand for online shopping well before Covid-19 hit but it has proved a worthy investment.
Having spent the vast majority of his career analysing Asian markets as a fund manager, Morton spent his spare time “itching a scratch” looking at the growth of the e-commerce market in the region.
He soon discovered how far behind the UK had been lagging, with the market dominated by just one company – Ocado.
“Grocery shopping as we know it hasn’t changed since the 1960s when we had housewives cooking our meals and cleaning our homes. It doesn’t reflect the way we currently live our lives,” Morton tells City A.M.
By the time the pandemic hit the UK Bother had built a solid advisory team of some big hitters in the e-commerce industry, ex leads at Deliveroo and Just Eat.
And with Bother in the final stages of a “very large capital raise” it is clear investors are buying into Morton’s proposition.
Bother expedited its launch by two months, offering deliveries to key workers as it became clear that Britain’s grocers were buckling under immense pressure from panic buying.
“We launched just to NHS key workers to relieve even just a tiny portion of the pressure the market was under at the time,” Morton tells City A.M.
Bother has since launched nationwide although its marketing efforts so far have relied largely on word of mouth as it expands slowly.
Supermarkets no longer own convenience
“We had the beginnings of what we thought was a very good product”, Morton says. “The real competitive advantage that we had, weirdly, in that time was that grocers were struggling with the fact they had to serve their current customers.”
Britain’s biggest supermarkets stopped new customers from signing up in a bid to ease pressure on supply chains and delivery slots.
Perhaps then the chaos vindicates Morton’s claims of inefficiency in the market, but he is quick to praise how quickly the supermarkets acted.
These companies do not contend with a global pandemic every day so is there a risk that demand for e-commerce, and therefore Bother’s role in the market, is a flash in the pan? Morton is adamant this isn’t the case: “These trends were already in place.”
What the founder seems keen to emphasise is that while the pandemic has highlighted some of the issues within the market, there are broader, more ingrained issues.
“Supermarkets used to own convenience and they did that by having massive store networks. They were a one-stop shop for getting all of your shopping done,” Morton says.
“Consumers are increasingly demanding online services but the supermarkets can’t make money in that. They can’t invest in it because they only think about how to make their store networks profitable. The answer is you can’t.”
Morton notes that as a result of this competitive advantage for three generations, they have not innovated or invested enough to retain the market appropriately.
Shop locally for fresh produce
Morton’s work has led him to the conclusion that people are wanting to shop more locally, particularly since the outbreak of Covid-19, leaving room for Bother in the market to deliver the “boring basics”.
In terms of efficiency Morton has a point: “Having fresh produce delivered through the same channels as the rest of your grocery shopping is massively inefficient for your cost and convenience because you need to be at home to take delivery.”
“It’s a ridiculous state of affairs… There’s no reason for us to have our dishwasher tablets delivered to us in a refrigerated van,” he adds.
There is likely some element of truth to the pickup in local shopping as people struggle to pick up online delivery slots. But a push to buy fresh produce from a local butcher or greengrocers is probably reserved for the more affluent in big cities. Initially Bother’s was mainly catering to an urban demographic but Morton says this is changing as the startup expands nationally.
While Bother claims to offer convenience for its customers, it is likely that for many families it will remain convenient to do a “big shop” once a week.
‘It’s not on the customer to solve the environmental crisis’
This is where Morton’s commitment to the environment comes in. He claims this commitment is what sets Bother apart from the likes of Amazon, which undoubtedly offers convenience.
The supermarkets are already fighting off the tech behemoth so whether a small London startup will be able to put up a fight is unlikely.
But Morton points to the “box economics” of both brands – on average Bother delivers 15 items per order while Amazon delivers 1.3.
The startup can therefore paint itself as the environmentally friendly alternative. Morton is at pains to explain this is not the case and is determined not to position the brand as such.
“The most important pillar of Bother is the environment. Although when we first go to market we come out with our convenience and price messaging first,” he explains.
With a huge pickup in interest in the environment following global climate protests why not push the sustainable narrative?
“We don’t like reductionist environments… There’s no point saying ‘let’s stop flying aeroplanes’ because that’s just not going to happen. Equally resurfacing coconuts is a very virtuous thing for brands to do and very easy for them to sell but it’s not scalable.”
“It’s preaching to people who probably already have an environmental bent to their lifestyles. It’s reductionist in its impact,” he adds.
Morton’s assessment is right: consumers are faced with a number of options for a ‘sustainable alternative’ but the price points are far higher. More often than not they go for the cheap, convenient option over the virtuous one.
“There’s no point in having a great environmental story unless we also have a story that resonates in the first instance with consumers,” Morton says.
“We don’t want to have a really good environmental position, but ask them to invest more in that proposition. Equally we don’t want to put guilt on consumers, we don’t think it’s on them to solve the environmental crisis.”
Whether consumers will set aside their loyalty to the big supermarkets, and increasingly to Amazon, remains to be seen but a disrupter to the market is welcome.