French food delivery startup Epicery is set to halt its operations on Tuesday, following one final festive season to support its clients and the local food businesses that utilised its platform over its nine years of activity, during which it charged a commission of 25%.
In a communication to its customers earlier this month, Epicery’s team explained that the decision was driven by ongoing economic and financial challenges, which they regrettably could not resolve despite their best efforts.
Epicery specialised in premium groceries and local delivery services. However, the surge in inflation led customers to reconsider their food expenditure. Even after scaling back operations in certain cities, the company reported a negative EBITDA of -€4.69 million in 2023, against sales of €2.57 million.
Prior to these challenges, Epicery had experienced unexpected success during the COVID-19 pandemic lockdown in France. The momentum continued into late 2021 when Geopost/DPDgroup, the express parcel delivery arm of Groupe La Poste (the national postal service in France), acquired a majority stake in the company.
This partnership was logical at the time, as Geopost was also an investor in the last-mile delivery service known as Stuart, a significant service provider for Epicery. However, in recent months, La Poste has severed ties with multiple startups it had previously supported, notably selling Stuart at a substantial loss.
In a statement shared with StartupSuperb, Geopost indicated that the decision was made after a thorough evaluation of Epicery’s financial and operational performance, concluding that “the subsidiary’s short- and medium-term profitability had been significantly affected by changes in the food delivery market, a gradual return to direct consumption from local shops post-COVID, and intense competition in the catering sector.”
Food delivery services in France in 2024 look remarkably different from Epicery’s early years, having launched in 2016. At that time, its competitors included Take Eat Easy, which ceased operations in 2016, while Deliveroo and Uber Eats were not yet established, and quick commerce had not yet undergone its rise and fall. Although Cajoo, Flink, Gopuff, and Gorillas are no longer operational in France, their marketing presence was significant for some time.
In contrast, Epicery’s scale and visibility have always been modest. The platform catered to approximately 25,000 regular customers, who purchased from around 1,100 local shops, primarily in Paris and Lyon, after scaling back on its national ventures. While this model could function as a standalone lifestyle business, it may have been less viable as a venture capital-backed entity, particularly within a larger group where such numbers have minimal impact, especially following the loss of synergies with Stuart.
Édouard Morhange, co-founder and CEO of Epicery, refrained from commenting on strategic matters due to a non-disclosure agreement. However, he expressed pride in Epicery’s accomplishments, stating, “I am very proud to have introduced local retailers to e-commerce over the last ten years, and I believe they will continue to enhance their digital sales in the coming years.”
Morhange plans to remain engaged in the food sector, revealing that he is currently developing “an ambitious new model to facilitate the digitalisation of the food industry in France and beyond.” Regarding Epicery’s employees, Geopost announced that all staff members will receive “support from HR teams to explore opportunities within the Group or assistance in securing new employment.”
Nicolas Machard, the French entrepreneur behind the food marketplace Pourdebon, which is also a subsidiary of Geopost, expressed confidence that Epicery’s employees will quickly find new positions. He believes that Geopost and Pourdebon remain a strong match from both a mission and an economic perspective. Pourdebon is a significant user of Geopost’s food delivery service Chronofresh and is projected to attain profitability by 2027, with aspirations to achieve this sooner.
While Epicery struggled with profitability, it occasionally drove sales of up to 10% or even 20% for the local shops it collaborated with. Co-founder Elsa Hermal, who departed operations in 2019, noted, “An essential milestone was reached when we fulfilled our initial promise to shop owners, establishing a crucial part of their business.” Hermal now works as a business coach and impact investor, including through the climate fund Satgana.
As an investor, Hermal acknowledges that Epicery operated in a challenging niche but does not view it as unviable. “Logistics enterprises are inherently complex and demanding in terms of metrics, but that doesn’t imply success is unattainable.” She believes that, given local businesses’ newfound exposure to such models, and in a climate where every sale is critical, it wouldn’t be surprising to witness a resurgence of an Epicery-like model in the future.
