Fortnum & Mason plans rapid food delivery service

Fortnum & Mason plans to enter the booming market for rapid food delivery and expand online and internationally after the pandemic severely affected sales at its flagship London store.

“The underlying story [this year] has been one of growth online. We thought this would slow after the shops reopened but it hasn’t,” chief executive Tom Athron told the Financial Times.

Ecommerce revenue at the 315-year-old group was more than half the total in the year to July 11, compared with a fifth before the pandemic.

“Sales to UK-based customers have basically doubled. We are showing up in people’s lives for more than just treats and gifting,” said Athron.

The former John Lewis executive, who took over from Ewan Venters in December 2020, is looking at opportunities in immediate delivery, where he thinks customer expectations are being “fundamentally reset”.

“Clearly the demand for emergency Florentines is going to be limited,” he acknowledged, while adding that the appeal of quick delivery of the company’s famous picnics and hampers was obvious.

“We will probably do it in partnership, but I don’t just want to list items on Amazon or Gorillas, that would be the wrong way to go about it.”

However, there are no current plans to open more UK stores beyond the West End flagship and satellites in the City and at travel hubs.

“In a world of constrained capital I would rather invest online. I can understand why Selfridges and Harvey Nichols expanded outside of London, but they took those decisions many years ago,” Athron said.

The site at 181 Piccadilly, purveyor of groceries to the Queen, will remain the focus of store investment despite a hit to visitor numbers that resulted in a £2.7m loss for the year to July 2021, against a £600,000 profit the year before.

Athron expected tourist numbers would take longer to recover than thought and working from home would also reduce footfall.

“But if anything, that means we should invest more in Piccadilly so it becomes even more of a destination,” he said, citing plans for theatre kitchens with live-streaming capability.

More stores overseas are possible. Fortnum & Mason operates one store in Hong Kong directly and has partnerships with department stores in Japan, Korea and Australia.

“We did have a store in Dubai which did not work out but I would like to look at that region again,” Athron said. Other areas such as the US are likely to be served online.

He would like to restart deliveries to consumers in Europe, which Fortnum & Mason stopped owing to the difficulties of exporting food products after Brexit.

“Fixing that will probably require a more constructive and forward-looking relationship with the rest of Europe than we have currently.”

Following the recent sale of Selfridges to Thailand’s Central Group, three of London’s most famous upmarket department stores are now foreign-owned.

But Athron does not foresee any change at Fortnum & Mason, which has been owned by the Anglo-Irish branch of the Weston family since the 1950s. “I firmly expect us to remain in our current hands.

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