French food delivery startup Epicery has ceased operations after struggling to overcome economic and financial challenges.
The company, known for its focus on premium groceries and local deliveries, faced significant headwinds in recent months due to rising inflation, which led customers to reassess their food spending. Despite ceasing operations in some cities, Epicery reported a negative EBITDA of €4.69 million in 2023 on sales of €2.57 million.
A Rollercoaster Ride: From Pandemic Boom to Post-COVID Struggles
Epicery experienced a surge in demand during the COVID-19 pandemic lockdowns in France. This unexpected growth led Geopost/DPDgroup, the express parcel delivery branch of Groupe La Poste, to acquire a majority stake in the company in late 2021. This alliance seemed logical at the time, given Geopost's investment in last-mile delivery service Stuart, a major partner for Epicery.
However, the tide turned as La Poste began to divest from several of its startup investments, including a significant loss on the sale of Stuart. This shift in strategy significantly impacted Epicery's operations.
A Changing Landscape: Navigating Increased Competition
The French food delivery landscape has undergone a dramatic transformation since Epicery's launch in 2016. While competitors like Take Eat Easy ceased operations early on, the emergence of players like Deliveroo and Uber Eats, along with the rise and fall of quick commerce services like Cajoo, Flink, Gopuff, and Gorillas, significantly intensified competition.
Despite operating with a focus on premium groceries and local deliveries, Epicery struggled to gain significant market share. The company served approximately 25,000 recurring customers, sourcing products from 1,100 local shops, primarily in Paris and Lyon after scaling back its national expansion. While this niche approach could have been successful as a standalone business, it proved challenging within the context of a large corporate group like Geopost, where such scale might not have been impactful enough.
Geopost's Perspective and Support for Employees
In a statement, Geopost attributed the decision to cease operations to an "in-depth analysis of Epicery's financial and operating performance." The company emphasized that the subsidiary's profitability was severely impacted by several factors, including:
- Market Dynamics: Changes in the food delivery market, including increased competition and a gradual return to direct consumption from local shops.
- Post-COVID Shift: A shift in consumer behavior away from online food ordering following the easing of pandemic restrictions.
Competition: Strong competition within the catering segment.
Geopost has committed to supporting Epicery's employees, offering assistance in finding new roles within the Group or external job placement services.
A Legacy of Connecting Local Businesses with E-commerce
Epicery co-founder and CEO Édouard Morhange, while bound by a non-disclosure agreement, expressed pride in introducing local retailers to e-commerce over the past decade. He acknowledged the challenges but emphasized that local businesses would continue to develop their digital sales. Morhange also announced plans to work on a new model to further support the digitalization of the food industry.
The Impact on Local Businesses
Despite the challenges, Epicery played a crucial role in driving e-commerce adoption among local businesses. According to Elsa Hermal, co-founder of Epicery, the platform successfully introduced e-commerce to many local shops, leading to a significant increase in their sales, sometimes reaching 10-20%. This achievement highlights the potential of online platforms to empower local businesses and contribute to the growth of the local economy.
Looking Ahead: The Future of Local Food Delivery
While Epicery's journey has come to an end, the need for innovative solutions to connect local businesses with consumers remains. The experience of Epicery serves as a valuable lesson, highlighting the complexities of operating in the food delivery sector and the importance of adaptability and sustainable business models.
Conclusion
Epicery's closure marks the end of an era in the French food delivery market. While the company faced numerous challenges, its impact on local businesses and the broader food industry cannot be ignored. As the food delivery landscape continues to evolve, the lessons learned from Epicery will undoubtedly inform future innovations and pave the way for new models that better serve both consumers and local businesses.
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