Rapid delivery firms shedding riders, closing warehouses

Rapid delivery firms are shedding riders and closing warehouses across the UK as the bubble bursts for ultra-quick grocery drop-off services, stated a recent report.

Some of the biggest names in the on-demand grocery sector, which persuaded cash-rich investors during the pandemic they were going to replace corner shop purchases with 15-minute deliveries, are pulling out of cities and towns as consumers desert their apps and doubts grow about the viability of the industry.

Gorillas, fuelled by millions of dollars of venture capital, has reduced its UK workforce and withdrawn from five British towns and cities, including Manchester and Nottingham, The Guardian reported. On-demand grocer Getir, backed by Abu Dhabi sovereign wealth fund investors and valued at more than the Morrisons supermarket chain, has put some of its UK stores into “hibernation” and reduced employee numbers, following a restructure.

Zapp, has cut its workforce by 10 percent and pulled out of Bristol, Cambridge and Manchester.

“The pandemic created a warped vision of the way people were going to buy their groceries in the decades to come,” The Guardian quoted Quaid Combstock, who once headed up delivery operations for Jiffy, as saying. “But when people could go out safely, the need for on-demand grocery receded. This is what the rapid delivery firms and their venture capital backers got completely wrong.”

Combstock, who left Jiffy in December 2021 and is now a consultant, said the profit margins on food are too low for firms to ever turn a profit. On-demand grocery app downloads and app usage have plummeted since firms have stopped offering delivery discounts.