The Quick Seems Dead as Ultrafast Grocers Retreat En Masse

It appears that the ultrafast grocery boom was short-lived. There have always been skeptics, but last year, it seemed to many that 10- and 15-minute grocery delivery services were the model of the future, and that quick commerce would continue to grow with no end in sight.

In 2022, however, rapid food inflation and ongoing supply chain and labor challenges have had many players in the space changing their tune.

Most recently, last Monday (July 4), it was reported that Berlin-based ultrafast startup Gorillas pulled out of Italy, a move that followed on the heels of the company’s departure from Belgium in June. Also reported was its search for a company to merge with or be acquired by, also in June, and of its widespread layoffs in May.

See also: Gorillas Leaves Belgium, Hands Off Some Business to Efarmz

Gorillas Talks Merger, Sale Potential with Grocery Delivery Rivals

German Delivery Service Gorillas Cuts 300 Jobs

Also in June, ultrafast grocer Jokr announced that it was ceasing operations in New York and Boston and focusing its attention on the Latin American market in an effort to drive profitability.

“We have decided to stop our business activities in the U.S. for now, which have lately only accounted for about 5% of our business,” Jokr CEO Ralf Wenzel said in a statement at the time quoted by Bloomberg News. “Latin America is particularly underpenetrated and underserved, that’s why Jokr has put its focus and emphasis on the Latin American opportunity since the beginning.”

Read more: Startup Jokr Ceases Fast Delivery in US to Focus on LatAm

These major moves in June followed a similar wave of activity back in March. At that time, ultrafast grocer Buyk filed a petition for Chapter 11 relief as part of its process of shutting down the company, winding down operations and getting rid of inventory and assets.

“We have diligently explored all possible options and partnerships to restructure Buyk and keep the business going, however, the war in Ukraine and subsequent restrictions in funding have unfortunately made it impossible to continue operations,” CEO James Walker said in a statement at the time.

Related news: Instant Grocery Delivery Service Buyk Closes, Files Bankruptcy Over Russian Sanctions

Also in March, Bloomberg reported that ultrafast grocer Fridge No More was closing up shop after discussions with restaurant aggregator DoorDash did not amount to anything,

“Investors were concerned about growing competition and about bad order economics, i.e. each order brings losses to the company,” Fridge No More’s CEO Pavel Danilov wrote to employees in a Slack message seen by the news outlet. “Fridge No More is no more, and we are closing the business effective today.”

The concern on investors’ part is something of a death blow to these startups, which had been relying on the influx of venture capital at a time when market conditions were more favorable to the model.

In a July 2021 interview with PYMNTS’ Karen Webster, Jokr Co-founder Zach Dennett said that part of the way the company can make money is by buying low, leveraging its limited inventory to offer exclusivity to manufacturers and in turn get a better deal on the items it stocks. However, with food prices skyrocketing, any model that relies on manufacturers’ ability to sell at a low price must be rethought.