As we approach the end of the year, I find myself contemplating the fluctuations within the food delivery sector, particularly in light of the recent announcement that the French food delivery startup Epicery is ceasing its operations. Epicery has long been associated with high-quality groceries and local deliveries, but it will no longer be available to its customers following a nine-year journey.
Earlier this month, the decision to shut down operations was communicated, with the company highlighting economic and financial hurdles that proved insurmountable despite their diligent efforts. In a statement directed at customers, Epicery’s team clarified that the prevailing economic conditions and intense competition within the food delivery sector rendered their business model untenable.
Highlights
The Journey of Epicery
Founded in 2016, Epicery initially thrived in a burgeoning market. The COVID-19 pandemic brought about a notable increase in demand as consumers turned to home food delivery solutions. Although this period represented a peak for Epicery, it was unfortunately short-lived.
As the pandemic waned and inflation escalated, customers began to reduce their expenditures on food delivery services. Even after withdrawing from several cities, Epicery continued to face challenges, recording a negative EBITDA of -€4.69 million in 2023 against sales of €2.57 million.
Strategic Partnerships and Issues
In late 2021, Geopost/DPDgroup, the parcel delivery division of Groupe La Poste, acquired a majority stake in Epicery. This partnership appeared promising, especially since Geopost also invested in last-mile delivery service Stuart, which was crucial for Epicery’s operations. However, in recent times, La Poste severed ties with multiple startups it had previously backed, including the divestment of Stuart at a considerable loss.
Geopost explained that the decision to close Epicery stemmed from a thorough evaluation of the company’s financial and operational performance. This assessment indicated that Epicery’s profitability for the near and medium-term had been significantly compromised by shifts in the food delivery market and heightened competition within the catering sector.
Effects on Local Enterprises and Workforce
With a modest yet impactful footprint, Epicery serviced around 25,000 loyal customers and collaborated with approximately 1,100 local shops, primarily located in Paris and Lyon. The company occasionally accounted for up to 10% or even 20% of the sales for these local retailers, a notable achievement that co-founder Elsa Hermal proudly acknowledged.
Following the closure, Geopost has pledged to assist the employees of Epicery, providing support from HR departments to help them secure new positions within the Group or elsewhere. French entrepreneur Nicolas Machard, who operates the food marketplace Pourdebon under Geopost, expressed optimistic sentiments regarding the re-employment prospects for Epicery’s staff.
Enduring Influence and Future Opportunities
Édouard Morhange, co-founder and CEO of Epicery, shared reflections on the company’s legacy, expressing pride in facilitating local retailers’ entry into e-commerce over the previous decade. Morhange is currently exploring a new model dedicated to enhancing the digitisation of the food industry both in France and internationally.
Although the closure of Epicery signals the conclusion of a chapter, it also highlights the intricate challenges faced by logistics enterprises. As Hermal remarked, these operations can be complex but are not insurmountable. A resurgence of an Epicery-like model in the future would not be an unexpected development.
As I reflect on Epicery’s story, it is evident that the food delivery startup encountered formidable obstacles, yet its influence on local businesses and the broader food delivery landscape is likely to be remembered.
