The Austrian grocery market is seeing a pullback from direct home delivery as costs rise adn consumer habits shift.Billa,a leading supermarket chain,announced today it will discontinue its in-house delivery service in eastern Austria by the end of January,marking a full exit from the market it once led. The move impacts roughly 250 employees at Billa’s Vienna warehouse locations, who will be offered positions within the company, and signals a broader recalibration within the online grocery sector following a pandemic-fueled boom. Moving forward, Billa will concentrate on partnerships with delivery services like foodora and its existing Click & Collect options.
Wirtschaft
Billa is discontinuing its in-house delivery service in eastern Austria effective the end of January, completely exiting the grocery delivery market. The supermarket chain stated that job offers within the company will be available for the approximately 250 employees at the two Billa warehouse locations in Vienna.
Billa will now focus its online efforts on express delivery in partnership with Foodora and its Click & Collect service. The strategic shift, the company said, is a response to “changing customer behavior and rising last-mile costs.” The end of Billa’s in-house delivery service also impacts drivers employed by external firms.
Smaller Billa Orders via Foodora
The supermarket chain already ended online home delivery outside the greater Vienna area in late 2024, citing economic reasons after nine years of operation. Billa, a subsidiary of Rewe, had previously identified itself as the market leader in online grocery retail in Austria. In 2024, Billa and Bipa together generated online sales of €114 million.
The online shop will remain operational, Billa confirmed. Smaller Billa orders can now be delivered via Foodora in Vienna, Graz, Linz, Traun, Salzburg, and Innsbruck.
Expansion of Online Business Since 2015
Unlike some competitors, Billa heavily invested in its online business. The online shop was expanded in 2015, and nationwide delivery across Austria was offered until 2024. In 2017, the supermarket chain opened its first dedicated warehouse for online operations in Vienna, followed by a second online warehouse in the city in 2020.
The online retail and grocery delivery sectors experienced a boom during the early years of the COVID-19 pandemic, including periods of lockdown. However, with the easing of the pandemic and the onset of the cost-of-living crisis, that online surge has cooled in Austria. Interspar also halted its food delivery services this year.
In Vienna, Billa and Hofer compete with online grocery retailers Alfies, Gurkerl, and Hausfreund for market share. Hofer offers grocery delivery in Vienna through the Roksh delivery service. Two pioneers in the Austrian online grocery market, the Tyrolean supermarket chain MPreis and the Upper Austrian retailer Unimarkt, have also completely shut down their online shops due to economic considerations. This trend underscores the challenges facing pure-play online grocery businesses as profitability remains elusive.
