The rapid grocery delivery revolution is over. Can we now all move on, please?
It’s been a bad week for the once piping hot rapid grocery delivery space.
Firstly, cash strapped Turkish firm Getir announced a global restructuring initiative, with plans to cut 2,500 jobs across five countries, or 10.9% of its total workforce.
It will continue to operate in Turkey, the UK, Germany, the Netherlands and the United States.
The company last month announced its exit from Italy, Spain, and Portugal.
It said in a press statement: “We will restructure the global organisation to significantly increase operational efficiency.”
“The Getir network consists of roughly 23,000 people across five countries. This number includes couriers, pickers, and office employees. Regrettably, we intend to reduce our team and, with a heavy heart, part ways with approximately 2,500 talented employees across our markets.”
It added: “Decisions like these are never taken lightly. However, Getir is determined to do right by all employees affected by the process in line with its values and in full compliance with local laws. We are very grateful to all colleagues for their hard work, dedication, and significant contributions to the business.”
It concluded: “The company remains fully committed to the future of the industry it pioneered eight years ago and will continue to lead it in the future.”
Secondly, Oja, a London-based venture that boasted Chelsea striker Raheem Sterling as an investor, fell into administration after staff and suppliers were left unpaid.
The startup, which specialised in African and Caribbean groceries, said it had “regrettably” suspended operations “due to funding constraints” with the last deliveries made on 30th July.
In an Evening Standard article about Oja, Russ Mould, Investment Director at AJ Bell, commented: “The challenges that face – and can take down - any firm also confront food delivery businesses: competition, customer dissatisfaction and regulation.”
“The regulator is also always watching, especially when it comes to the issue of workers’ rights, their pay, benefits, conditions and hours. Food delivery is thin margin at best – Ocado has been at it for 20 odd years and never consistently made a profit, either as a stand-alone business or in the joint venture with M&S – and increased costs are an unwelcome burden.”
He added: “The butcher’s boy and baker’s boy on their bike died out for a reason – it was cheaper and easier to get customers to come to your shop – and it is possible that an era of ultra-cheap money has helped to conceal the cost of distance, which is also rising owing to oil and fuel prices.”
True dat.
Quick commerce startups had their 15 minutes of fame during the Covid-19 outbreak, when we were stuck at home for months on end and had nothing better to do with our time than see how quickly someone could get four pints of milk, a sausage roll and a bottle of tomato ketchup to our front door. Or was that just me?
The amount of VC money burnt investing in this space was staggering. Anyone with a modicum of common sense could predict what was around the corner.
Which was as follows…when Covid-19 restrictions disappeared, people started to venture out of their houses again, jumping at the chance to socialise in pubs, bars, restaurants, cinemas etc.
Throw in a cost-of-living crisis and, well, you can guess the rest. It's pretty bleak out there for on demand grocery delivery services, with the path to profitability unclear.
Expect more high profile closures, exits from markets and, sadly, job losses over the coming months.
Here’s where the story ends. Can we all now move on to the next ridiculously overhyped big thing in retail technology, please?
Mind controlled payments in the metaverse, anyone? Anyone? Anyone???
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