End of expansion - Is the profitable delivery service an eternal dream?

The supermarket via app: Delivery services for groceries are considered a future field for online trade. But the providers are now curtailing their bold plans for the spread in Germany. Now Knuspr is also taking a step back – a delivery service that has so far been active in Munich and Frankfurt and actually wanted to cover all major German cities in a short time.

Knuspr is postponing the opening of its Hamburg location indefinitely - even though the automated delivery warehouse is almost ready for use. The delivery service first wants to reduce the ongoing losses at the two existing German locations before the expensive start in the north is tackled, Knuspr boss Erich Comor told WELT.

Knuspr, which is backed by the Czech supply group Rohlik, is not the only supplier slowing down. In view of the crisis-related capital crunch, the entire industry is concerned with proving that the respective business model can become profitable at all in the foreseeable future. Because currently no provider can count on the fact that the fresh venture capital required for rapid expansion can be obtained on acceptable terms.

The express delivery services are hit the hardest. Unlike Knuspr, they send out their couriers by e-bike immediately after the order is received. This model burns a lot of money. The Berlin pioneer Gorillas is therefore being absorbed by the much larger Istanbul competitor Getir and is likely to lay off more employees in the process.

The direct competitor Flink, in which Rewe has a stake, had its Austrian business run into insolvency a few weeks ago. According to the trade journal "Lebensmittel Zeitung", all internal projects at Flink in Germany, such as the development of a private label, are now being put to the test.

Flink originally planned a new round of financing with venture capitalists for the fall, but canceled it due to the lack of prospects. Now the existing money should be enough for two years - a feat, since according to the report only 40 of 200 locations are profitable before marketing costs. So far, Flink has raised around one billion euros in venture capital.

Knuspr, on the other hand, does not have to cut any jobs, Comor emphasized. So far, only a small team has been working in Hamburg, which is being used temporarily for the Munich and Frankfurt locations or for maintaining the warehouse that has already been set up on the Elbe island of Wilhelmsburg.

Knuspr has fully automated the warehouse. With the system used by the Norwegian logistics technician Autostore, many warehouse workers are superfluous. This should increase efficiency to such an extent that Knuspr can work profitably.

In Munich, the provider has already extensively converted its warehouse – initially only the non-refrigerated area, meanwhile an auto store is also being set up in the refrigerated warehouse. Automation is still to take place in Frankfurt/Main.

Unlike Flink and Gorillas, Knuspr targets larger purchases that families order three hours to several days in advance. Knuspr also relies on higher-quality offers from regional farmers, for example. With the concept, the Munich location should be working profitably within 2023, Frankfurt/Main half a year later.

This requires 400 to 500 orders per location and day - a brand that is within reach, at least in Munich. In the fiscal year up to the end of April, Knuspr wants to achieve sales of 100 million euros in Germany - mainly at the Munich location, where 1,000 of the approximately 1,300 employees work.

Germany is central to the strategy of the Czech Rohlik Group. She wants to show here that her concept, which is already working at home, works across Europe – even in a high-wage country.

It is also no coincidence that Rohlik is active in Frankfurt/Main: the group is aiming for an IPO in Frankfurt/Main in the medium term. "It's still our plan. But there is nothing concrete yet,” said Comor. The stock market climate is currently not considered to be conducive to IPOs - especially not for business models that are still generating start-up losses. So far, Rohlik has received around 600 million euros in venture capital.

The Hamburg start was originally supposed to take place by October 2022, but now the subsequently named date in the first quarter of 2023 is waste. The openings planned for Cologne, Düsseldorf and Berlin are also in the stars.

The decision will only be made when there is experience with Hamburg, said Comor now. This puts the goal of supplying all larger German cities and soon reaching billions in sales a long way off.

Knuspr is also being overtaken in Germany by the delivery service Picnic, which has been deliberately slow to expand so far. According to a concept they call the "milkman principle", the Dutch only deliver on fixed delivery dates, but they want to be particularly efficient and cost-effective.

Edeka has been an investor for some time with a 20 percent stake and wants to take on the Rewe delivery service with Picnic. In Hamburg, where Edeka has its headquarters, the plans are particularly ambitious: Up to 200 jobs are to be created in the warehouse, a total of 1000 in the region up to Kiel. Picnic also wants to get started in Frankfurt/Main and Berlin.

So far, the provider in Germany has concentrated on NRW - and there especially on suburban areas. As early as 2020, Picnic had a turnover of 155 million euros in Germany.

"We don't see the start of the picnic in Hamburg as a threat," Knuspr boss Comor played down the competitor's lead. Both concepts served different target groups. It is also advantageous if several providers make ordering groceries online popular.

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