Yahoo Finance Gopuff to pull out of Spain as q-commerce belt tightening continues
The q-commerce belt tightening continues: U.S. category veteran Gopuff, the SoftBank-backed delivery platform juggernaut -- which was being valued at $15 billionN as recently as 2020, and had been rumored to be prepping for an IPO at the start of this year (er, nope that didn't happen!) -- is dialling back its ambitions in Europe.
According to a report in Bloomberg, which cites people familiar with the matter, the speedy grocery delivery player is planning to pull out of Spain in a bid to slim its ops and push for profitability -- a move that will also see it put its regional focus on the U.K. market, per the report.
The news publisher says the U.K. is one of Gopuff's fastest growing markets, with revenue there increasing at a 30% compound monthly rate.
A spokesperson for Gopuff declined to comment on Bloomberg's report but we understand the substance of the story is correct.
Gopuff only launched in Europe in November 2021. At the time it was talking bullishly about major regional expansion -- saying it would go to "every country in Europe" -- so it's quite the reversal of fortunes, though not one unique to Gopuff. The entire q-commerce category has been hit hard post-pandemic, as in-person activity returned to urban living -- and especially as the economic downturn has taken a bite out of on-demand demand, encouraging shoppers to prioritize price over convenience (or indeed impulse treats like late night ice cream).
In July, Gopuff announced it was cutting 10% of its global workforce (circa 1,500 staff) and closing dozens of warehouses, saying it needed to rein in spending after expanding too rapidly during the pandemic.
Earlier, in the spring, it also confirmed any potential IPO filing was on ice owing to the market downturn.
As well as the U.K. and Spain, Gopuff operates in France -- where it launched in March in Paris and the majority of Île-de-France, plus parts of Marseille, Lille, and Toulouse -- kicking off its launch there with talk of further expansion soon. But that may no longer be on the cards if it's set on prioritizing the U.K. market.
The U.K. market remains hotly contested with a range of 'instant grocery' players still in action, including Deliveroo (also recently pulling back in mainland Europe), Getir and Zapp, to name a few. Though there has also been some recent market exits (such as newbie Jiffy, which swiftly pivoted to B2B this May).
Gopuff used investor cash and acquisition to grab itself a speedy slice of European q-commerce -- picking up smaller U.K. rivals Dija and Fancy to get the ball rolling in the region. (And, per Bloomberg, its Spanish ops, which include some 180 staff and five dark stores in Madrid, derive from its purchase of Dija -- so pity staffers who've had to cycle through multiple employers in a few short years and either face another new owner shortly or else could find themselves out of a job.)
In Spain, Gopuff's departure will likely be a boon to local rival Glovo, which has, in recent years, focused increasing effort on q-commerce via an expanding dark store play. Although the tough economic conditions have hit the local on-demand brand too -- and at the turn of the new year it quietly agreed to be acquired by German rival, Delivery Hero, shuttering any prospects of making its own IPO.
In an additional twist, last month, Glovo and Delivery Hero offices were targeted for antitrust inspections by the European Commission -- which said it was investigating preliminary concerns over potential breaches of EU competition laws against forming cartels and other restrictive business practices. No formal objections have been filed -- and the probe may yet come to nothing. But quite what will be left of Europe's volatile q-commerce landscape in a few years' -- or even months' -- time is anyone's guess!
Also on the horizon: A pan-EU regulation of platform workers which could further crank up the pressure on gig economy players.
Looming rule-tightening on workers rights inside the bloc may help explain decisions by a number of gig platform giants to prioritize the U.K. market -- which is no longer an EU member, so won't be subject to incoming reforms. While homegrown on-demand platform Deliveroo has already prevailed in a number of workers rights challenges in U.K. courts -- potentially providing rivals with a template for threading the tricky operational-legal needle on that side of the English Channel.
This report was updated with a correction: We originally stated Gopuff operates a service in Germany but that it not correct -- it does not have a presence in that market.
