Food e-commerce isn’t for everyone (yet)

At a time when cost pressure is growing, many grocery retailers are reviewing their online business in terms of its impact on the bottom line. At the end of last year one of Europe’s leading omnichannel grocery retailers, Ahold Delhaize sold its US grocery home delivery service FreshDirect to Getir.

The food e-commerce business model isn’t working. Last month Lithuanian market leader Maxima shut down its Barbora home delivery service in Poland. The decision seems justified in the light of the impact of the e-commerce expansion on the group’s results: based on the latest available data for 2022, Maxima Group has reported a group operating profit of EUR 182m. Barbora’s online operations had a EUR 23.7m negative effect on the EBITDA, mainly resulting from the increase in the footprint of the home delivery service from its own dark stores in Poland.

This article is available for reading in Trade magazin 2024/6-7

Even online pure players haven’t become profitable in Europe. Ocado Retail in the UK – previously considered to be a kind of gold standard in European online grocery retail – has been making triple-digit million losses in recent years. According to Reuters, the retailer expects its technology division to generate enough revenue to become profitable on a pre-tax basis over the next 5-6 years.