The stat: Investment in rapid grocery has fallen by more than 50% in 2022, per Pitchbook, as high operational costs and fierce competition dim investor enthusiasm.
Quick commerce companies consolidate: While last year’s gold rush fueled a wave of startups, the number of players is rapidly diminishing as cash reserves run dry. Should Getir acquire Gorillas, that number will shrink further, leaving only two major players—Getir and Gopuff—whose primary business is rapid grocery delivery.
But even that may not be enough to guarantee their survival as established delivery companies like Uber Eats, DoorDash, and Deliveroo take advantage of their existing infrastructure to build out rapid fulfillment capabilities.
The evolution of the dark store: Uber Eat’s partnership with Iceland is notable because it represents a significant departure from the tactics rapid grocery startups—and even competitors like DoorDash and Deliveroo—have taken to build out their quick commerce capabilities.
An uncertain outlook: While rapid delivery startups have cut staff and exited markets in a drastic attempt to reduce costs, that may not be enough to protect them as inflation causes consumers to pull back on grocery and food delivery.
To stay alive, these companies need to find more sustainable ways to scale—either along the lines of Gopuff’s partnership with Grubhub, which broadens its audience considerably, or by adjusting the dark store model to make it easier for customers to make a purchase. Otherwise, the only players left standing will be the same ones that dominated before the pandemic.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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