The grocery delivery industry, which blossomed during the lockdown, is through a hard period of adjustment, with investors predicting that just a few of firms will survive in each market – and then, in very different shape.
Investors invested billions into “quick commerce” supermarket startups that promised to supply supplies ranging from spaghetti to soap powder within 15 minutes from customised hubs known as dark stores while the COVID-19 plague kept shoppers behind locked doors.
However, with lockdowns relaxing, consumers grappling with rising living costs, and profitability remaining elusive, the flood of capital has slowed to a trickle, and enterprises have switched from expansion to retrenchment.
Getir of Turkey, the largest and oldest of the rapid grocery delivery companies, Gorillas of Germany, and Zapp of the United Kingdom have all announced layoffs in recent weeks, while Berlin-based Flink has also paused hiring.
Jiffy, based in London, said last month that it was ceasing delivery operations, with Zapp, which raised $200 million in January, absorbing its customers.
‘The current macroeconomic environment has become exceedingly tough, with very little visibility of when things will change,’ Zapp wrote in an email to Reuters.
So far this year, according to Citi analyst Monique Pollard, seven or eight smaller companies have been forced to seek buyers or close their doors. ‘It’s happening faster than we expected,’ she remarked.
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