Interview: Mike Callachan, CEO of Dundee-based grocery delivery app Snappy Shopper

Mike Callachan is chief executive of Snappy Shopper, a tech firm enabling consumers to have groceries delivered quickly from local convenience stores – and now aiming to turbocharge growth far beyond its Dundee base.

It says it can have a customer’s order on their doorstep in as little as 30 minutes, and, tapping into increased post-pandemic appetite for such an offering, has been achieving year-on-year growth of more than 50 per cent, fulfilling in excess of 5.5 million orders last year from its network of 1,800-plus merchants including Scotmid, Spar, and Nisa.

Callachan doesn’t object to the description of the app-powered firm uniting modern technology with the old-fashioned bricks-and-mortar convenience shop sector. “I think ‘old-fashioned’ is a great way to think about this,” he says – and cites Snappy Shopper investor and senior adviser Justin King, who for a decade was chief executive of Sainsbury’s, who said he backed it “because what you're doing isn't actually new”.

King, who also previously led the food arm of M&S, explained to Callachan his memories of when the corner shop had a bike with a basket at the front for deliveries, especially suiting certain customers who couldn't get to the retailer, and would phone in their order for, say, bread, milk, and eggs. Callachan states: “I [therefore] think what we're doing is a very old-fashioned concept, but we're doing it in a modern way. And I think it's a very important part of retailers’ business, both now and in the future.”

The firm says it gained traction during the pandemic, with consumers becoming more comfortable with ordering groceries online. Picture: contributed.

The business – part of Snappy Group that was founded in 2017 and also includes hospitality-focused tech specialist Hungrrr that has worked with the likes of Ellon-based craft beer giant BrewDog – has seen not just King dip into his pockets to provide funding.

Indeed, at the end of last year it said it had raised a seven-figure sum from existing investors Kelvin Capital, Scottish Enterprise, and Highland Technology. That comes after Snappy in 2021 raised £19.4 million in an oversubscribed Series A fundraise, when it targeted creating 400 jobs in three years. Participating investor Lord Laidlaw at the time in his role as Highland Tech chairman branding The Snappy Group “one of the most exciting Scottish tech companies”. The Scottish business tycoon and philanthropist had, when he decided he wanted to meet Callachan, flown in on his private jet from Monaco to do so.

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Snappy Shopper’s CEO says it gained traction during the pandemic, with consumers becoming more comfortable with ordering groceries online, and retailers keen to and seen by many as needing to hitch their wagons to the rapidly encroaching digital world. Specifically, Callachan says the firm is trying to “piggyback” on what it sees as an increase in “top-up” shopping, with people, say, supplementing a big supermarket haul with purchases at convenience stores, but not finding it possible or convenient to do the latter.

'We're still at the beginning [of our journey], closer to the beginning than the end,' says the Snappy Shopper CEO. Picture: Ian Barclay.

The firm initially found favour with certain demographics, such as time-poor overworked professionals, elderly people, the disabled, and single parents, for example, but the pandemic saw many more people need to use it.

However, it is not the only player in the rapid grocery delivery market, with rivals including Uber Eats and Deliveroo (the latter said earlier this year that on-demand grocery deliveries comprised more than a tenth of its revenues in the second half of its financial year).

How can Snappy Shopper compete with these giants and their existing customers? Callachan says value for money is a key plus, as the Scottish firm charges the same amount for products as in store, while competitors impose a significant mark-up (with some items more than twice as expensive than buying direct, according to one calculation). “I think a fair price ultimately, in the long term, should win,” the Snappy boss says, with the firm’s average basket size £26.

According to Statista, revenue in the UK grocery delivery market is expected to show a compound annual growth rate of 13.04 per cent between 2023 and 2027, resulting in a projected market volume exceeding £29 billion.

Callachan explains how he previously built a business called MTC, named after his own initials, that is based in Dundee and Edinburgh, and he grew it over 15 years, building technology platforms for large organisations, and growing to more than 130 people – "a similar size to Snappy”.

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But his path to his current role came about as, “I was looking for a way I could take all of my technology experience and do something that was good, that would actually improve people's lives. And this is really the idea that resonated with me, the David versus Goliath story, the little corner shop versus the supermarket [situation] that appealed to me… it's very human problems we're solving with the technology”.

Now, its “ultimate vision” is building what it calls the digital high street, already starting to pilot in Dundee and in Edinburgh the bringing of other merchants, such as the local butcher and baker. "Long term, we believe that local businesses on the high street are going to need to do some sort of online offering and we believe that Snappy can be that digital high street.”

It is also seeing interest internationally, and has already inked a major, soon-to-be-announced deal with a major European name, “and if that goes well, I think we might start to look at international much more seriously… we're excited about the future because if we start getting some of these international deals up and running, then the growth rate will increase”.

As for the possibility of, say, a flotation on the stock market, he says any such move would be far into the future: “We're really privileged to have options, we've got very supportive investors, we've got regular approaches from new investors, we have a fantastic management team… we’re in a great place. We're still at the beginning [of our journey], closer to the beginning than the end. And our investors are aligned with that.”