Express looks into milk-float home shopping

EXPRESS DAIRIES is looking to use its fleet of 1600 milk-floats to move into the provision of services to households such as home shopping and the collection of recyclable paper.

The company, which was de-merged from Northern Foods in March, feels that home delivery will enable it to increase the use of its vans by offering additional services in the afternoons after the completion of normal morning milk rounds.

Express Dairies has held talks with major supermarket groups, food manufacturers and waste companies about linking up to provide door-to-door services. "We think that in the longer term we may have a role to play in home shopping," said Neil Davidson, the company's chief executive.

It is preparing for the expansion by offering its army of milkmen hand- held computers that will enable them to input the details of a household's requirements. Customers will then receive itemised bills for the first time, while Express will develop a consumer database.

The company hopes to use the information to target promotional material and establish which households would be interested in additional services such as home delivery and paper collection.

Chris Haskins, the Express Dairies chairman, said: "I don't think we are looking at something in the next six months, because we have to roll out the handsets first, but it is something that we are looking at. Milk- floats, with their electric operation, are very environmentally friendly."

The initiative could well prove attractive to supermarket operators, which are becoming increasingly involved in home delivery. The stumbling block may be the size of the milk-floats, most of which are too small to carry a full range of supermarket products to the doorstep.

Unigate held talks with a major supermarket group a couple of years ago about helping with home delivery but the talks foundered on lack of capacity. Tesco, Sainsbury and Iceland are all running home-delivery operations, but they are all using their own vans.

The comments came as Express Dairies reported a 40 per cent increase in operating profits to pounds 62.5m in the year to March. Mr Davidson said the doorstep delivery market was still ripe for consolidation and that the company would play its part. Express doorstep delivery sales fell by 7 per cent last year, a slower rate than previously forecast. The company expects consolidation in the doorstep delivery market and analysts said Express was more likely to take the lead role in a shake-up than Unigate, its main rival.

Investment column, page 23