The UK will become the priority overseas market for US rapid grocer Gopuff, after it was revealed the company will be pulling out of Spain.
Bloomberg, citing “a person familiar with the matter”, reported yesterday the quick commerce player would be withdrawing from Spain just six months after officially launching there, in an effort to reach profitability.
“The process is ongoing so it would not be appropriate for Gopuff to comment further at this time,” a spokesman for Gopuff told The Grocer.
The UK is one of Gopuff’s fastest growing markets, with revenue here increasing at a 30% compound monthly rate.
Gopuff’s operations in Spain came as part of its acquisition of rapid grocer Dija in August last year, which the company at the time said would give it “immediate presence” in both Spain and France. The company said there were “additional plans for continued, rapid expansion”.
“Together, we will continue to innovate and define the instant needs economy across Europe and bring the category to more customers in the region,” said Daniel Folkman, Gopuff SVP of business, when the acquisition was announced.
Since then, Gopuff, as well as several of its instant needs rivals, have announced staff cuts and dark store closures as they pursue a profitable operating model.
In March, Gopuff said it was to cut 3% of its global workforce, a figure which was raised to 10% – around 1,500 workers – last month.
On Tuesday, The Wall Street Journal reported Gopuff – which raised around $2 billion in funding rounds last year – was looking to borrow up to $300 million in a revolving credit line.
According to data from YipitData, around 30% of Gopuff orders are discounted. It is still spending big on marketing the service, in June signing a multi-year sponsorship deal with The O2 venue. Despite this, Apptopia data shows that in the UK, monthly downloads of the Gopuff app – as per its rivals – have been in decline since March.
Research by Bain & Company consultants show that at current daily volumes of 300 to 600 orders per dark store, rapid grocers could be spending more than twice as much as they earn on every order.
No comments yet