‘FRESH’ OUT OF LUCK
Strapped food-delivery pioneer nears exit ramp
Food-delivery pioneer FreshDirect may be nearing its expiration date as money-bleeding parent Getir looks to dump the Big Apple grocer — just six months after buying the company, The Post has learned.
Turkey-based Getir, which scooped up FreshDirect from Stop & Shop owner Ahold Delhaize USA last November, has come under pressure to cut costs from its investors, which include Abu Dhabi sovereign wealth fund Mubadala Investment Co., Tiger Global and Sequoia Capital, according to a Sky News report.
Getir — a delivery service that operates in select US markets as well as in the UK, the Netherlands and Germany — is burning through as much as $50 million a month, according to a Bloomberg report.
The company was once valued at $12 billion at the height of the pandemic boom as many shoppers turned to online services for their food delivery.
“Getir is withdrawing from every city except its own home. They don‘t have the capital to pay for everything. They can’t afford FreshDirect,” industry consultant Brittain Ladd, a former Amazon executive, told The Post.
“In my opinion if FreshDirect can’t raise additional capital to modernize the company and invest in it, I don’t see how it lasts longer than a year.”
That doesn’t bode well for the 3,200 workers employed by FreshDirect, which was launched 25 years ago by former Fairway Market chief executive Joe Fedele and investment banker Jason Ackerman.
Others also think FreshDirect’s long run may soon be over, despite a loyal customer base.
“I don’t think there’s a reason for FreshDirect to exist anymore,” Dan Glickberg, a retail technology consultant whose family co-founded Fairway Market, told The Post.
‘Hasn’t evolved’
“It was a pioneer early on, but the business hasn’t really evolved since then.”
FreshDirect did not respond to multiple requests for comment.
Getir declined to comment on “market rumors,” a spokeswoman said in an email.
FreshDirect had looked for a buyer for a number of years before Ahold bid in 2021.
However, FreshDirect was so in the red by the time Getir came calling that Ahold had to pay the Turkish company to get it off its balance sheet, multiple sources told The Post.
Terms of Getir’s acquisition were not disclosed.
Ladd said his contacts at Getir and at Wall Street banks told him Ahold gave Getir $151 million “to take FreshDirect off [its] hands.” In addition, Ahold invested $30 million in Getir, according to Ladd.
Gristedes owner and billionaire John Catsimatides, who considered acquiring FreshDirect several times over the years, told The Post that he’d also heard Ahold was “paying people to buy the company.”
A third source, a top commercial food executive who did not want to be identified, told The Post that Getir paid $1 for FreshDirect.
“Ahold wanted to get out so badly that they were willing to give it away,” the source said.
Ahold did not respond for comment, but according to its 2023 fourth-quarter earnings results, it lost around $270 million on the divestment of FreshDirect.
Aside from high overhead costs, FreshDirect struggled with new technology that broke down frequently, causing botched orders and ultimately the firing of CEO Ackerman in September 2018.
I don’t see how it lasts longer than a year. — Industry expert Brittain Ladd.