Gorillas’ Retreat signals the reckoning for delivery apps

Gorillas isn’t the only fast delivery app affected by these issues. “Rising inflation and a worsening macroeconomic outlook around the world have forced all companies, especially in the technology industry, including Getir, to adapt to the new climate,” says Turancan Salur, CEO of Getir in Europe.

Companies like Gorillas and Getir planned to burn through huge amounts of cash by aggressively buying up market share, Gevaers says. “Then, at a certain point, it’s not your business, but your client base that becomes interesting.” Getir has proven its business model works, Salur says, as many of its stores in the company’s first market in Turkey are profitable.

Gorillas workers in Belgium who lose their jobs are eased under the country’s labor rules, which grant full-time workers at least four months’ pay as compensation. Some of the office workers have been hired by a Belgian food delivery company, Efarmz, which has bought Gorillas’ “local business information on quick trade”, the company said in a statement. The company declined to share more details about the deal.

In Spain, Gorillas employees are nervously watching the fate of their Belgian colleagues. As in Belgium before the layoffs, they were told that the Spanish subsidiary had limited time to find a buyer or investor. Around 300 workers in the country have been sent official notices implying that their redundancy is imminent.

The app continues to operate, but management is encouraging staff to look for new jobs, said one current employee, who works in the Madrid office and spoke on condition of anonymity. “The warehouses are not getting new products,” they say, adding that the number of orders per warehouse has dropped to about 20 per day. “They’re just waiting for them to run out of stock.” Spanish labor laws are less generous than Belgian ones. Gorilla workers who face redundancy there will be entitled to a minimum of 20 days’ pay per year of work. Gorillas declined to comment on its agreements with individual employees.

The gorillas in Denmark are also waiting to learn their fate, while the branch is struggling to find a buyer or cash injection. Over the past year, it has struggled to meet sales targets, said one employee who asked to remain anonymous, as warehouses receive only 70 to 80 orders a day. Districts there have also been plagued by staffing issues, and an internal Slack channel regularly features pleas from managers for help because no bike couriers have shown up for work, they added. Gorillas declined to comment on what it called “the specifics of its day-to-day operations.”

Rider groups in Belgium are concerned that Gorillas’ exit will give the impression that companies that employ their staff on permanent contracts are not sustainable. “Many of us come back to work for platforms like Uber Eats,” says Camille Peteers, a driver for the Brussels-based Couriers Collective, adding that Uber Eats does not employ drivers as employees. “At a time when some have announced they are leaving the market, Deliveroo strongly believes in fast trading and fast deliveries in Belgium,” said Rodolphe Van Nuffel, spokesman for Deliveroo Belgium. The company’s drivers in the country are self-employed.

Gorillas says it believes its business will be profitable in about three months and the company will be profitable as a group in about a year. But for analysts, Gorillas’ departure calls into question something more fundamental: That the current economics of delivery apps doesn’t add up. As these companies raced to dominate big cities, they took some questionable shortcuts, says Marc-André Kamel, head of Bain & Company’s global retail practice. “They ignored the laws of gravity and built businesses without a clear path to full profitability,” he says. “They promised ultra-convenience, but in most countries customer satisfaction is very poor.” Claiming 10- or 15-minute delivery sounds appealing in terms of marketing, he adds, but it creates huge expectations for service that are often disappointed. In December, Gorillas quietly removed its 10-minute delivery promise from its website.

“The market recently sent a wake-up call to all these start-ups,” says Kamel, “reminding them that they need to find a path to profitability and be better retailers, delighting customers, if they want to stay in business.” ”

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