It seems a lifetime ago that a rapid grocery delivery startup could pull in staggering investments to secure a billion-pound valuation months after launch.
As it turns out, it was less than five years ago – which is not unlike a lifetime in tech. The Covid-fuelled era of low interest rates and a sudden need to having everything delivered propelled rapid delivery firms to dizzying heights not justified by the small matter of profitability.
The normalising of consumer habits following the reopening of the economy sparked a big restructuring of the sector, with some firms withdrawing from different markets, some reforming their business model and others shutting down completely.
Now the market has settled down, there remains a handful of players dedicated to the idea that money can be made delivering groceries in under an hour.
Here are the biggest rapid delivery firms operating in the UK.
Uber Eats
Originally launched as a takeaway delivery arm of an app-based taxi empire, Uber Eats expanded to groceries in 2020 just in time for the pandemic that forced millions of consumers to avoid physical outings and order in.
Like its US parent, Uber Eats is (just about) profitable in the UK – reporting a post-tax profit of £14m in its most recent accounts – but its delivery service is still dominated by takeaways, which account for around 60% of its orders.
Deliveroo
The London-based Uber Eats challenger actually beat the Californian giant to expanding its deliveries to groceries by five months. Despite being quick to the game, the company has had a hard time turning enviable customer numbers into profit.
For years the business shed cash, prompting CEO Will Shu to enact an intense cost-cutting strategy that included layoffs and pulling out of a handful of international markets.
To the firm’s credit, the plan seems to have paid off, with Deliveroo reporting its first full year of profitability – £2.9m – earlier this month.
Zapp
Like many of its rivals, Zapp has faced losses every year since its launch in 2020. The London-focused grocery delivery startup saw its losses hit as much as £92m in 2022.
After some hefty downsizing in staff numbers, the company was able to slash its losses to £23m in 2023 and has claimed its unreleased 2024 accounts show even greater improvement.
Zapp was able to cut these losses by stripping its business down to the essentials. While Getir aggressively expanded internationally through various acquisitions over a short period, Zapp has focused on a handful of affluent areas of central London. The company is prioritising quality over quantity, leaning on high-value individual orders over market dominance.
Just Eat
One of the earliest modern takeaway delivery firms to operate in the UK – the company was founded in 2001 in Denmark and expanded to the UK in 2006 – Just Eat has been through plenty of ups and downs, having listed and delisted from the London Stock Exchange and Nasdaq. In February, the firm was acquired by private equity firm Prosus in a 4.1bn euro deal.
Just Eat started offering grocery delivery in 2021 through a partnership with Asda. A decade ago, the company pulled in an operating profit of £19m, whereas its most recent accounts in the UK reveal a loss of £10.8m.
GoPuff
American firm GoPuff entered the UK in 2021 through the acquisition of Newcastle-based startup Fancy.
Though the company has done well in orders, with almost two million active customers, it has struggled with profitability. 2022 saw GoPuff lay off 1,750 employees across two rounds of firings as well as close 76 warehouses in the US.
Whoosh
Whoosh was launched as a rapid delivery service by Tesco in 2021, with the supermarket giant not wanting to lose market share to pandemic-powered startups.
The service was launched to meet consumer desires rather than for pure profit as Tesco doesn’t have to worry as much as the likes of Deliveroo and Zapp over profitability, for its core business anyway.
Though Whoosh was created as a pandemic service and Tesco’s startup competitors have been dropping like flies, the company has said it intends to continue to support the service and widen availability.
Whoosh now serves 66% of the UK and operates from 1,424 Express stores, according to Tesco’s 2024 annual report, which said the service accounted for around a fifth of its growth in online sales.
Zoom
Like Whoosh, Zoom was an effort from an incumbent grocery firm – Ocado – to capitalise on the rise of rapid delivery.
The service hasn’t proved as successful as Ocado would have liked. In 2023, Ocado undertook a strategy and capacity review for the Zoom network, which concluded that it should shut down several Zoom distribution hubs, a move which cost the firm £27.4m in impairments.
More recently, Ocado seems to be more concerned with seeking profitability from its automated warehouse technology and core retail business, though it did take the effort to rebrand the service from Ocado Zoom to Zoom by Ocado in 2022.
