A striking paradox has been observed: there is widespread talk about grocery chains expanding vigorously in Saudi Arabia, with claims that they have surpassed 5,000 branches, while the presence of “rapid delivery” apps and purchasing needs from the phone is accelerating. The paradox seems shocking only if we assume that technology eliminates reality. But it does not; it changes the terms of competition and redefines the “value” that people are willing to pay for.

“Actual speed” is not always the speed of the app

The app shortens the search and demand, but it does not eliminate two critical elements in daily purchasing: waiting and uncertainty (Will the delivery person be late? Will alternatives change? Are there additional fees?). In contrast, the proximity store offers a simple promise: “You enter and exit within minutes.” Here, economic value becomes the reduction of both time and mental cost, not just the reduction of the product's price.

This intersects with an operational reality known in the logistics sector: “the last mile of delivery” is the most costly and complex part of the supply chain, and as consumer expectations for speed rise, profit margins shrink unless population density and demand are frequent enough.

The real product is the “moment” not the “basket”

In proximity stores, the basket is often small, but the frequency is high. People do not come for weekly shopping, but for urgent needs: water, tissues, bread, a charger, or something “missing now.” This is why these stores thrive at natural traffic points: within neighborhoods, near schools, and along roads and gas stations. These locations create what resembles a “guaranteed flow” that does not require massive campaigns to convince you to come… because you are passing by anyway.

From a consumer behavior perspective, many uses of “rapid delivery” rise in moments of time pressure or running out of essentials—meaning that the competition here is not on the idea of need, but on who fulfills it with the least friction.

Unit economics: How does a small branch profit?

Success here is not romantic; it is precise calculations. Proximity stores typically rely on:

  • Rapid inventory turnover (the product does not sit on the shelf).
  • A product mix that balances essentials with lower margins and ready/convenient items with higher margins.
  • Strict inventory management because space is limited and mistakes are costly.

Therefore, it is not surprising that market reports indicate clear growth in “proximity store” channels in Saudi Arabia driven by urbanization and changing lifestyles, and that they are among the fastest-growing channels in retail food trade.

Expansion creates a “network” on the ground

In the world of apps, we hear about “network effects.” On the ground, something similar happens: the more branches there are, the better the purchasing conditions from suppliers, the lower the relative distribution cost, the more familiar the brand becomes, and the higher the confidence that “the branch is on my way.” This is not a digital network effect, but a network of locations—and it is often harsher on competitors because building it requires time, licenses, operation, and daily discipline.

Why don’t apps “kill” these stores?

Because each channel serves a different scenario:

  • The app is excellent for planned purchases, large baskets, and gathering weekly needs.
  • The proximity store is excellent for momentary purchases, emergencies, and immediate needs.

Even economically, the “rapid delivery” model becomes more sustainable when orders are geographically close and frequent enough to alleviate the burden of the “last mile”; otherwise, outside these conditions, the margin erodes quickly.

The smartest today: a data-driven reality

Successful real-world projects do not oppose technology; rather, they use it to improve operations: forecasting demand, reducing waste, smarter pricing, and faster restocking. In other words, they do not try to become an “app,” but they become better at being a store.

How do we read the success of real-world projects in the age of apps?

If you see a project on the ground growing amidst digital noise, ask five simple lenses:

  1. Does it sell “proximity and immediacy” more than it sells a product?
  2. Does its location create a natural flow of customers (neighborhood/road/station)?
  3. Are its economics based on high frequency and rapid inventory turnover?
  4. Does expansion increase its negotiating and logistical efficiency, not distract its operation?
  5. Does it use technology to reduce waste and improve supply instead of relying solely on promotions?

If these conditions are met, the success of “reality” is not against digital… but rather the other side of it: when people’s expectations rise, those who provide the least friction win… regardless of the channel.