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As Getir exits the UK, adding yet another country exit to its roster, Vineta Bajaj takes a look at the meteoric rise and lightning speed downfall of speedy grocery.<\/strong><\/p>\n Founded in 2015, Getir became one of the largest of more than a dozen rapid delivery companies, raising more than $5bn in VC funding during the pandemic.<\/span><\/p>\n DoorDash, Jiffy, Zapp, Gorillas and GoPuff all subsequently exploded onto the lockdown scene like a food delivery volcano fuelled by hope, greedy VCs and a misguided view of the future of grocery delivery. <\/span>\u00a0<\/span><\/p>\n At its peak Getir, backed by Middle Eastern venture capital, was worth $12bn.\u00a0 This is more than Morrisons and Marks & Spencer combined.<\/span>\u00a0<\/span><\/p>\n At the height of rapid delivery demand in 2021, over $18bn was invested into speedy grocery companies through venture capital.\u00a0 Gopuff raised $3.4bn and Gorillas, whose business model was based on that of Gopuff, raised $1.4 bn.<\/span><\/p>\n Speedy grocery was running away with itself.\u00a0 Turning a blind eye to the mediocre performances of longer standing competitors Deliveroo, Amazon and Just Eat, venture capitalists and start up CEOs forged their way to misguided glory, chasing mirages of untold successes down a dead end path.\u00a0<\/span><\/p>\n They seemingly gave little thought to the gaping holes in their business plans and the demand such rapid expansion would have on employees and local communities.<\/span><\/p>\n With heavily populated cities as their dominion, the only way for rapid delivery to live up to its name was through the use of dark stores.\u00a0 Essentially a high street store with no shop front.\u00a0 A mini boarded up warehouse next to your local coffee shop.\u00a0<\/span><\/p>\n In early 2022, there were 115 dark stores blighting New York\u2019s five boroughs.\u00a0<\/span><\/p>\n Dark stores are fulfilment centres only.\u00a0 There is no sense of community or local integration.\u00a0 They are places for workers to grab their goods and go, and despite the fact <\/span>workers are – unlike Deliveroo – fully employed and receive e-bikes, the truth is far from rosy with \u201chighly casualised, intensive and often unsafe working conditions\u201d seemingly normalised, according to Social Europe.<\/span><\/p>\n Work and labour is managed through algorithms as a way of ramping up delivery-time targets and orders per delivery with very little human interaction or empathy.\u00a0\u00a0<\/span><\/p>\n A flawed business model and disregard for macro economic conditions combined with unsustainably high levels of funding and a workforce treated as canon fodder has led to the arguably, inevitable collapse of the pandemic\u2019s bright stars.\u00a0\u00a0<\/span><\/p>\n In June 2023, just two years after a valuation of \u00a39.6bn, Getir left France after filing for bankruptcy. It also announced that it was planning to leave Spain following a mass redundancy process.\u00a0 By 24th August 2023, Getir had lost $1bn and cut 10.9% of its global workforce.\u00a0\u00a0\u00a0<\/span><\/p>\n Despite such significant setbacks, Getir confidently declared it was maintaining its operations in the UK, The Netherlands, Germany and Turkey.\u00a0\u00a0\u00a0<\/span><\/p>\n Yet less than a year later, Getir is pulling the plug in the UK as well as Germany and the Netherlands, costing 1,500 jobs in the UK alone.\u00a0 Operations are now confined solely to the US and Turkey.\u00a0<\/span><\/p>\n The company simply did not live up to financial expectations after raising an enormous $1.3bn across three rounds of funding over the space of just 10 months.\u00a0\u00a0\u00a0<\/span><\/p>\n Although the biggest player in the market, Getir is not the only victim.\u00a0 The market and consumer demand have changed with lightning speed with May 2022 being the crunch point. Huge expansion, rapid investment and growth have all dissolved in a matter of three years.\u00a0\u00a0<\/span><\/p>\n US headquartered DoorDash had to swallow a net loss of $1.36bn in 2022. <\/span>\u00a0<\/span>London based rival Zapp reduced its workforce by 10% and pulled out of Bristol, Cambridge and Manchester. By mid-2022, Berlin darling Gorillas had withdrawn from five British cities including Manchester and Nottingham and found itself falling from <\/span>unicorn to cut price acquisition in two years.\u00a0 \u00a0<\/span><\/p>\n Getir bought the company<\/span> in December 2022 for $1bn after being valued just 10 months previously at $3.1bn.\u00a0\u00a0\u00a0<\/span><\/p>\n A dozen unicorns unwittingly galloping their way to mass layoffs, consolidation, market exits and cut price acquisitions before being put out to metaphorical business pasture.<\/span><\/p>\n \u00a0Sign up here\u00a0to g<\/span>et the latest news straight into your inbox each morning<\/span>\u00a0<\/span><\/strong><\/p>\n As a concept, speedy grocery\u2019s business model was flawed from the outset.\u00a0 <\/span>\u00a0<\/span><\/p>\n The pandemic created a false sense of security for speedy grocery.\u00a0 It was a bubble in many ways which created completely new consumer shopping patterns and a reliance on technology and home delivery for access to food not seen before or since.\u00a0\u00a0<\/span><\/p>\n There are five generations of spending power in our society, many of whom are now struggling with the daily cost of living and simply can\u2019t afford the premiums such ultra convenience brings to the table. Ironically people are now suffering from the macro-economic knock-on effect of the very thing which made speedy delivery, briefly, so successful.\u00a0\u00a0<\/span><\/p>\n The margins on food are simply too low.\u00a0 The delivery charge plus the margin is not enough to make a profit once the cost of fuel, warehousing operations, salaries, management staff, energy, advertising and office space are factored in.\u00a0 Not to mention a business model built on the consistent fulfilment of low value orders.\u00a0\u00a0\u00a0<\/span><\/p>\n If rapid delivery firms charged the right amount for fulfilment to the customer that they actually needed to, even the laziest amongst us would simply walk to the corner shop. As people slipped back into their post-pandemic shopping habits, the companies began haemorrhaging money as consumer demand and profit fell.\u00a0\u00a0<\/span><\/p>\n Start-ups turned a blind eye to the fact that Deliveroo, Amazon Fresh and Uber Eat weren\u2019t exactly towering empires, but these companies have achieved comparable success.\u00a0\u00a0\u00a0<\/span><\/p>\n These successes hinged on the fact they were able to partner with major takeaway and grocery retailers. Deliveroo and Uber Eats have partnerships with Sainsburys, Co-op, Waitrose, Aldi and Just Eat partners with Tesco and Asda. Sainsbury’s customers can also order via the Just East app.\u00a0<\/span><\/p>\n With delivery promised in up to 60 minutes, the pace is slightly slower but it seems consumers are happy with this.\u00a0\u00a0<\/span><\/p>\n Partnering with Deliveroo and Uber Eats has given the supermarkets and restaurants access to their own rapid delivery service by outsourcing the costs of technology and couriers. <\/span><\/p>\n Deliveroo gains access to a huge network of powerful partners plus an established customer base without the costs of food storage and warehouse operations.\u00a0<\/span><\/p>\n This approach seems like a win-win and a much more sustainable model.<\/span><\/p>\n We do live in an instant gratification society but this doesn\u2019t come at any cost. Inflation and cost of living has forced us all to take stock and reassess our behaviours regardless of how busy we are.<\/span><\/p>\n Speedy grocery was an industry founded on greed, fear and consumer laziness, giving false hope to tech CEOs and venture capitalists that such rapid growth was sustainable.\u00a0 But in a post-pandemic world we simply don\u2019t need to pay a premium to have bananas delivered to our door in 15 minutes.\u00a0\u00a0<\/span><\/p>\n At best, speedy grocery could be described as an interesting experiment from which valuable lessons have been learnt.\u00a0 At worst, it was a moral melting pot with exploitation at its heart.<\/span><\/p>\n As Getir retreats back to home turf with its tail between its legs, the period of inevitable consolidation following an unprecedented boom is far from over.\u00a0\u00a0<\/span><\/p>\n It seems rapid delivery\u2019s only route for survival is to follow in the footsteps of Deliveroo and Just Eat by forging partnerships with more established supermarkets, restaurants and retailers.<\/span><\/p>\n What customers really want is satisfaction and good customer service.\u00a0 But they also want choice.<\/span><\/p>\n So maybe there is a future for quick commerce but only as a small subset of a wider hybrid model as the doors remain open to new partnerships, continued acquisitions and consolidations.<\/span><\/p>\n Vineta Bajaj is CFO of pan-Europe online grocery firm Rohlik Group, and held various finance director roles at Ocado<\/em><\/p>\n<\/div>\n![\"Getir\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2024\/05\/Getir_Shutterstock_2198299241.jpg\")
As of November 2021, Getir operated in all 81 regional capital cities of its home country Turkey as well as 15 UK cities, 15 Dutch cities, 7 German cities and 3 US cities with a total of 28 million downloads – streets ahead of its competitors.<\/span><\/p>\nThe impact on workers and communities<\/h3>\n
![\"\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2024\/05\/Getir_Shutterstock_2070455240.jpg\")
The downfall<\/h3>\n![\"\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2024\/05\/Gorillas_Shutterstock_2009586386.jpg\")
Smooth-talking tech start up CEOs persuaded cash rich investors that rapid grocery delivery would replace the traditional corner shop model during the pandemic and beyond. That they would effectively change the convenience grocery market.\u00a0\u00a0<\/span><\/p>\n
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\nSo why didn\u2019t it work?<\/h3>\n
![\"\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2022\/02\/Waitrose-Deliveroo.jpg\")
The supermarkets\u2019 rapid delivery arms were created in response to the likes of Getir but only as a small part of their long established online delivery services.\u00a0 <\/span><\/p>\nSo what have we learnt from the speedy grocery era?<\/h3>\n