EXCLUSIVE: Snappy Shopper using ‘anti-competitive’ terms to force small shops to drop rival delivery firms

Snappy Shopper is using ‘anti-competitive’ exclusivity clauses in its contracts to pressure independent stores into dropping rival delivery firms.

Messages seen by RN show Snappy Shopper is identifying partnered stores working with other delivery platforms, and then warning them to abandon the rival service. Others claimed they were put off from working with other services by the requirement.

However, despite the pressure on small independent stores, multiple-owned stores partnered with Snappy Shopper, including those owned by the East of England Co-op, continue to operate several delivery services, leading one industry source to claim that small shops were being unfairly treated by Snappy Shopper.

For instance, the Co-op society’s store on Austin Street in Ipswich is listed on both Deliveroo and Snappy Shopper. At least 500 orders have been completed by the store on rival platforms to Snappy Shopper.

An anonymous industry source told RN: “It’s clearly anti-competitive practice, it’s bad for customers and bad for retailers. Both should be free to chose the delivery platforms they think are right for them.”

Responding to the claims, a spokesperson from Snappy Shopper said: “Snappy Shopper works in open partnership with its retailers to support profitable sales growth, enabling them to compete in the home delivery market with an affordable and high-performing tech solution. We invest heavily in our proposition on behalf of independent retailers, helping them generate significant levels of incremental sales and supporting the high street.”

Snappy Shopper’s ‘retailer standard terms’ include the following clause: “The retailer shall not, for the term of this contract and for a period of three months after the termination or expiry of the contract […] introduce a grocery home delivery service (whether operated by the retailer or by a third party) to any active store or any store which was formerly an active store under the contract, and shall promptly terminate any discussions anticipating the introduction of any such other service.”

The terms also allow Snappy Shopper to charge stores the value of three month’s worth of fees if Snappy Shopper ends a contract due to a breach of terms by the retailer.

RN understands that stores partnered with Snappy Shopper are free to market their takeaway and/or food to go solutions with a rival delivery provider if they choose, with exclusivity only applied to grocery items.

In September last year, similar exclusivity clauses in PayPoint contracts barring retailers from working with rival platforms were described as ‘an abuse of a dominant position’ by regulators Ofgem.

The concerns around Snappy Shopper’s exclusivity clauses come the week after the group named former Sainsbury’s boss Justin King as an advisor and investor. The delivery platform expanded rapidly under lockdown, signing partnerships with Nisa and Blakemore which are projected to fuel further Snappy Shopper growth in 2021.

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