Getir’s speedy UK exit: What went wrong?

Getir has confirmed it will exit the UK market, a move which is expected to affect approximately 1,500 jobs.

It’s been a dramatic downfall for the firm, which is also exiting Europe and the US to focus on its Turkish domestic market.

Just two years ago, boosted by the surge of popularity in online grocery shopping in the pandemic, Getir was valued at a whopping $12bn (£9.6bn).

Where did it all go wrong for the ultra-fast delivery firm? We explore its rapid expansion, post-pandemic struggles, and whether Getir was just too over-ambitious.

A rapid expansion

Founded in Turkey in 2015, Getir – which means ‘to bring’ in Turkish – was launched as an app on which people could order groceries on demand, which were delivered to the doorstep within minutes.

Its model differs from fulfilment services like Deliveroo as Getir creates dark stores, which act as micro-fulfilment centres, in urban areas that carry groceries and household essentials.

It launched in the UK in September 2021 and in the same year, it expanded into the Netherlands, France, Spain, Germany, Portugal, the US and Italy, as well as 81 new cities in Turkey.

By January 2022, Getir had pledged to invest £100m in the UK and by February, it doubled in size creating 4,000 jobs.

Consumer champion, and online retail expert Martin Newman says this “over-expansion” was the wrong move.

“They’d have been better to double down in one or two markets initially, get the model right and grow from there.”

Despite the significant expansion into seven new countries, Getir didn’t stop there.

In November of the same year, Getir acquired rival rapid delivery firm Gorillas for £1.2bn and the two companies launched Europe’s biggest store network for ultrafast grocery delivery to serve customers in the UK, Germany and the Netherlands.

Newman said the cost of acquisitions like this “depleted their capital and cash reserves, and also added complexity to their operating model and structure”.

Slowing demand in a saturated market

At the height of the pandemic, demand for convenience and online delivery soared, benefitting Getir to the extent that its valuation hit almost $12bn (£9.6bn) in early 2022.

However, the online demand has since slowed, which Newman says is due to consumers being “more prone to being out and about, and in the shops”.

“The rapid delivery space has also been significantly affected by the cost-of-living crisis and a reduction in consumer spending,” he adds.

“Why would you pay extra for rapid home delivery if you don’t need to? This obvious drop off in demand in turn has led to private equity and venture capital funding drying up”.

While changing consumer shopping habits is a factor, Getir’s rapid expansion, in the UK specifically, also came at a time when the market became increasingly saturated.

While the likes of delivery giants Deliveroo, Just Eat and Uber Eats started on a different path to Getir, focusing on restaurant partners instead of supermarkets, many of them have since partnered with some the biggest supermarkets in the UK.

Many grocery retailers have also created their own rapid delivery services in recent years, including Tesco’s Whoosh, Sainsbury’s Chop Chop and Zoom by Ocado.

Was Getir too over-ambitious?

It wasn’t long before Getir started to retreat and scale back its UK operations.

In March 2023, the speedy grocery delivery firm had begun to layoff staff en masse in what one worker described as a “redundancy massacre” and the following month, it closed a raft of dark stores, including all of its shops in Wales and South West England, alongside stores in Birmingham and London – a move it claimed was due to “optimising our combined store network with Gorillas”.

A month later in May, Getir’s UK boss Chris Chaaya – who was previously the UK boss of Gorilla’s prior to Getir’s £1bn acquisition of the rival in 2022 – exited the business amid the period of uncertainty.

By June, Getir had pulled out of Spain and Portugal where it laid off its entire workforce, and also ceased all operations in France.

At the time, it said the decision would “allow it to focus its financial resources on existing markets where the opportunities for operational profitability and sustainable growth are stronger” as the UK, the US, Germany, the Netherlands and Turkey were generating 96% of its revenues.

In July, Getir launched a new fundraising round led by Mubadala, the Abu Dhabi sovereign wealth fund, as it was understood that the company was seeking a somewhere in the region of $500m (£398.7m).

However, rumours were swirling that Getir was looking to exit the UK, with reports last summer of it selling off dozens of bikes, chiller cabinets and delivery boxes as it closed several dark stores around the UK.

It also made more than 10% of its global team – 2,500 roles – redundant last summer as it looked to make operational efficiencies.

In September, Getir’s valuation had dropped to $2.5bn (£1.9bn) – a stark contrast to its the nearly $12bn (£9.6bn) in 2022.

Getir: a brief timeline

What’s next for Getir?

Following its exit from the UK, Germany and the Netherlands, Getir will focus on its domestic market in Turkey instead – which accounts for 93% of its revenue. However, it will retain its US arm FreshDirect, which it only acquired from Ahold Delhaize in November 2023.

The firm said: “Getir has raised a new investment round, led by Mubadala and G Squared. Getir will utilize these funds to bolster its competitive position in its core food and grocery delivery businesses in Turkey.

“Getir expresses its sincere appreciation for the dedication and hard work of all its employees in the UK, Germany, the Netherlands, and the US.”

While Getir was ultimately unable to conquer the UK’s quick grocery delivery space, Newman says the easing of the cost-of-living crisis “will lead to an uptick for this space, providing these players can survive until then,” adding that “cash preservation will be key”.

With the sector having huge potential in the UK but the environment still being a challenging one, only time will tell if other players will boom or bust.