French food delivery startup Epicery will cease operations on Tuesday, after a final holiday season for its customers and local food businesses that used the platform during its nine years in business in exchange for a 25% commission.
In a message announcing the decision to customers earlier this month, the Epicery team said it was “a result of the economic and financial challenges we have been facing for several months and which, despite our best efforts, we have not be able to overcome them. “
With a focus on premium groceries and local delivery, Epicery suffered when inflation caused customers to rethink their grocery spending. Even after ceasing operations in several cities, it had a negative EBITDA of -4.69 million euros in 2023, with sales of 2.57 million euros.
However, before these difficulties, the startup reached unexpected highs when France went into lockdown during the COVID-19 pandemic. It was still on that wave in late 2021 when Geopost/DPDgroup, the express package delivery arm of Groupe La Poste, which handles France’s national postal service, took a majority stake in the company.
The corporate alliance made sense at the time: Geopost was also an investor in last-mile delivery service Stuart, of which Epicery was a heavy user. But in recent months, La Poste cut ties with several startups it had previously invested in, and in particular, sold Stuart at a significant loss.
In a statement shared with TechCrunch, Geopost stated that the decision was made “after an in-depth analysis of (Epicery’s) financial and operational performance” leading to the conclusion that “the subsidiary’s short- and medium-term profitability has been severely impacted by developments in the grocery market food delivery, a gradual post-Covid return to direct consumption from local stores and strong competition in the catering segment.”
Food delivery in France in 2024 looked very different compared to the early years of Epicery (it started in 2016). At the time, its competitors included Take Eat Easy, which went out of business in 2016, but Deliveroo and Uber Eats were nowhere to be seen, and fast-paced commerce hadn’t weathered its rise and fall. While Cajoo, Flink, Gopuff and Gorillas no longer operate in France, their marketing presence was hard to salvage for a long time.
In comparison, Epicery’s scale and visibility were always modest. It had around 25,000 repeat customers, buying from around 1,100 local stores, mainly in Paris and Lyon as it scaled back on its national expansion. This might make sense as a standalone, lifestyle business, but perhaps less so as a VC-backed business, and even less so as part of a large group where numbers like these hardly move the needle, especially with Stuart’s synergies disappearing.
Epicery co-founder and CEO Édouard Morhange was unable to comment on strategic aspects due to a non-disclosure agreement. In a personal statement, however, he commented on Epicery’s legacy. “I am very proud to have introduced local retailers to e-commerce over the past 10 years and I am confident that they will continue to develop their digital sales over the coming years.”
Morhange will remain active in the food sector, saying it is currently working on “an ambitious new model that will enable the food industry to pursue its digitalisation in France and abroad”. As for the Epicery employees, Geopost said they will each receive “support from HR teams to discuss opportunities within the Group or to help them find a job”.
French entrepreneur Nicolas Machard, whose Pourdebon food market is also a subsidiary of Geopost, said he is confident Epicery employees will soon take on new roles. He is also confident that Geopost and Pourdebon are still a great fit, mission-wise and economically. Not only is Pourdebon a heavy user of Geopost’s food delivery service Chronofresh, but it is also on track to break even in 2027 and will likely work to reach that milestone earlier.
Epicery failed to make the math work on the profitability front, but sometimes brought in as much as 10% or even 20% on sales to the local stores it worked with. According to Elsa Hermal, who co-founded Epicery with Morhange and VC Marc Menasé before stepping down from operations in 2019, this was a very important milestone.
“What’s great, and what’s very important to me, is that what we promised (store owners) at the beginning, and what took us a long time to achieve, has now become an important part of their business,” said Hermal, who is now a business coach and impact investor through the Satgana climate fund.
As an investor, Hermal knows that Epicery was operating in a complex location, but he doesn’t think it’s prohibited. “Logistics businesses are complicated and challenging in terms of metrics, but that doesn’t mean it can’t be done.” Now that local businesses have gotten a taste of this, and in a context where every sale counts, it wouldn’t be too surprising to see an Epicery-like model return at some point.
