Flash delivery company Getir suffered a loss of nearly $600 million last year, compared with revenue of just $500 million. Who writes the FD. And the fact that the loss exceeds the turnover is exceptional, according to marketing and retail professor Kitty Koelemeijer of Nyenrode Business University.
Draw a parallel with Uber for this. “They’ve also suffered billions in losses for years, but this point has never been reached,” he says. ‘For me it’s not even the size of the loss that’s surprising, but the low turnover. The market for flash delivery in the Netherlands is around one billion and growing, but not that fast. And the European market is only 25 billion».
And so pay attention to fast delivery drivers, he thinks. “So in a market that is growing – or should be – they have to pay attention to costs,” she continues. “So is this an accident or is there really a decline in growth?”
‘It’s not going well’
Koelemeijer points out that the current situation is not exactly favorable for Getir either. “It’s not easy for them either,” he continues. “There is inflation, people have less to spend and flash delivery drivers have thrived during covid. But now people are returning to the shops. Personally, I think the need is still there and there is still growth in the industry, but the question is whether that need will continue to be filled by these types of companies.’
According to Koelemeijer, existing supermarkets are also increasingly moving towards flash delivery. ‘Think, for example, of the collaboration between Jumbo and Gorillas. It is therefore possible that if the situation recovers, other parties will play an important role. (…) Things are not looking good for this type of company.’
Not scared
Getir itself, however, isn’t concerned at all, but will have a hard time sustaining a burn rate like this. “He’s very tall,” concludes Koelemeijer. ‘They may be able to go on for another year, but investors also know that money is less cheap than it used to be. Then they will put pressure on the results. And then Getir has to show something. So if the business model can’t be profitable in a reasonable amount of time, then they have a problem.’
He doesn’t dare make a prediction, but he thinks it plausible that the big supermarkets are taking a real step forward towards flash delivery. ‘And there’s still time for that, because the market accounts for less than two percent of total food turnover. So there’s still a lot going on in that area.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
