Corona boom over

Billa slashes its delivery service

The delivery area is being restricted for economic reasons.

(Bild: P. Huber)

For nine years, customers of the supermarket chain were able to enjoy the delivery service. This is now over for many. From December 1, the company's own delivery service will only be available in Vienna and parts of Lower Austria and Burgenland. 

According to Billa, the two large warehouses in Vienna will be able to reach "a third of all customers in Austria". The Click & Collect business and the cooperation with the delivery service Foodora are being expanded.

Market leader sees too little growth potential
According to Rewe subsidiary Billa, it is the market leader in online grocery retail in Austria. "Demand in e-commerce has not collapsed in the country, but it hasn't grown any further either. We simply don't see the same growth potential here as in Vienna," Billa online boss David Renker told the newspaper "Kurier" (Wednesday edition). Renker wants to double online sales in the next three years despite restrictions on delivery.

The delivery business has apparently not really picked up, especially in rural areas. The company is now concentrating on urban areas.

(Bild: APA/HELMUT FOHRINGER)

End hits external delivery staff hard
From the beginning of December, the Billa delivery area will extend from Mistelbach in the north to Wiener Neustadt in the south and from St. Pölten in the west to Bruck an der Leitha in the east, according to Billa. The end of Austria-wide home delivery will affect delivery staff who are employed by an external company.

In Vienna, Graz, Linz, Traun and Innsbruck, smaller Billa purchases will also be delivered by the Foodora delivery service. From November 26, this will also be possible in the city of Salzburg. Orders can be placed via the Foodora app. The supermarket chain sees potential in Click & Collect. By the end of the year, all Billa Plus stores across Austria will have their own counters and parking spaces for Click & Collect customers. With Click & Collect, customers can pre-order online and pick up their purchases at the store.

Online boom during the pandemic is slowing down
Unlike its competitors, Billa relied heavily on its online business. The online store was expanded in 2015 and nationwide delivery has been offered in Austria since then. In 2017, the supermarket chain opened its first own warehouse for the online business in Vienna, and a second online warehouse was added in Vienna in 2020.

In the first years of the coronavirus pandemic, including lockdowns, online retail and home grocery delivery boomed. However, the online boom in this country came to an end when the pandemic and the inflation crisis flattened out.

A highly competitive market
In Vienna, online grocery retailers Alfies, Gurkerl and Hausfreund are fighting for market share alongside Billa, Hofer and Interspar. Interspar delivers in the greater Vienna area as well as in the city of Salzburg and the surrounding area. The discount retailer Hofer offers home grocery delivery in Vienna with its Roksh delivery service.

Two pioneers in the domestic online grocery trade - the Tyrolean supermarket chain MPreis and the Upper Austrian local supplier Unimarkt - closed their online stores completely this year for economic reasons.

Online share of total sales still low
Billa's online sales in 2023 amounted to 78 million euros and Bipa's to 25 million euros. There is no potential to make a profit in the short term, but it would be "fatal" not to offer this sales channel, Billa/Bipa Group CEO Marcel Haraszti explained in the spring. By comparison, the total gross sales of Billa, Billa Plus, Bipa, Adeg and Rewe Austria Touristik increased by 9.6 percent to 10.45 billion euros in 2023.