Rapid grocery apps take it slowly after Dutch cities push back

Bloomberg

Rapid delivery companies have curbed their ambitions in the Netherlands after disgruntled Dutch cities put a halt on the explosive growth of their distribution centers.
After months of consultations, Flink SE, Getir and Gorillas signed a joint code of conduct that could crimp their ability to make super-fast deliveries in a concession to Dutch municipalities.
The companies pledged to limit the speed of their delivery riders’ e-bikes to 25 kilometres (16 miles) per hour and said they will not open the so-called “dark stores” in central shopping streets, pedestrian zones or near schools.
The voluntary restrictions in the European Union’s fifth-largest economy come as the rapid delivery business faces growing headwinds, including investors increasingly cautious about loss-making technology companies, intense competition and consumers returning to in-person shopping as they resume commuting following the Covid-19 pandemic.
The joint action comes after Amsterdam, Rotterdam and Utrecht imposed a one-year freeze on new distribution hubs from flash delivery companies. The cites said the rapid growth of dark stores, which are warehouses often placed in residential areas close to customers, had led to an surge in noise and nuisance complaints from locals.
Demand for e-grocery may be waning now that most economies have reopened after the pandemic, according to Bloomberg Intelligence analyst Charles Allen.
Assumptions that rapid delivery will become a significant part of the grocery market and that there will be “few winners but those that do win will win big” flooded these companies with capital and allowed them to operate at a loss for an extended period, Allen said.
Getir Perakende Lojistik AS, a startup, was valued at $11.8 billion after a $768 million funding round in March. Flink agreed on a deal this month that valued it at $5 billion, according to a person familiar with the matter who asked for anonymity because the matter is private.
The Sunday Times reported that Gorillas Technologies GmbH, backed by Delivery Hero SE and Tencent, was seeking new funding that would value it at $5 billion.