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@jaitch
Tesco's have a hub in Leybourne just off the M20 south east of london. that one only services south/south east/ a bit of east london. they have others placed around the other sides which service the rest. The drivers are only allowed to travel on certain roads to get to their destinations as well and certainly in SE London theres a few stores that are only accessible via a circuitous route and the vehicles need to be in and out within a certain timeframe overnight/early morning.
HGVs are used because whilst servicing the smaller shops in the centre, the drivers will also have delivered to larger stores on the way in and back out in order to maximise their day. as re-iterated above they cant have smaller and more vans on the roads bacuase of the much higher cost. also (and im not sure of the answer to this) is one HGV making a daily drop to multiple shops better environmentally than multiple vans each visiting less shops?
there is also the issue that whatever the size of the vehicle delivering, they are still going to park in that spot and be there for approximately the same amount of time and cyclists will still have to go around them.
Also its not uncommon for the JIT technology to be TOO good in that the system tells the hub they need X delivered so this get loaded onto a lorry going the right way that has other stops. then the same store reports it needs Y delivered and so that gets loaded onto a different lorry going to slightly different set of stores but you can frequently arrive at a store as the driver and have to wait for the other tesco driver to finish delivering before they can get in to drop theirs.