Move over, New York. Chicago is the newest flashpoint in the rapid grocery delivery competition. Turkish delivery firm Getir launched in Chicago earlier this month, joining startup 1520 in the city. Both firms promise to deliver groceries in under 20 minutes, filling orders out of dark stores.
[Update: On Thursday evening, Business Insider reported that 1520 had ceased operations.]
Getir’s initial presence in the city comprises seven dark stores, Grocery Dive reported. A press release indicates the service will be available to residents along the lakefront area between Chinatown and Rogers Park, and as far inland as Logan Square. If you connect the dots, it’s as much as 40 square miles worth of coverage, implying each store has a delivery range of about 1.5 miles.
“Our expansion into the United States is well-timed; we’ve been perfecting our approach in ultra-fast delivery since we created the model six years ago. Now that we’re established and thriving in Europe, it’s an optimal time for us to move further afield and introduce ourselves to the U.S. market,” said Getir founder Nazim Salur in a statement. The company went on to say it expects to launch in New York City and Boston by the end of 2021.
The U.S. launch will cap a momentous year for the Istanbul-based company, which launched in the U.K., Netherlands, Germany, France, Spain, Italy and Portugal over the course of 2021. The company recently announced a deal to acquire U.K. rival Weezy. Getir has raised more than $1 billion to finance its rapid expansion, including a recent $550 million round from big-name investors such as Tiger Global, Sequoia and Silver Lake. That round valued the company at more than $7 billion, making it by far the most valuable of the rapid grocery delivery players.
Getir, which launched in 2015, commands the heights in its home country. The service is available in 47 cities there, and in January the Financial Times reported the company was filling 5 million orders per month in Turkey.
Getir delivery costs just $1.99, and the company is advertising aggressive discounts. Other rapid grocery delivery services have gone further. Both Buyk and Jokr offer free delivery with no minimum purchase amount. The companies are likely using investor collars to subsidize purchases on their platform in a bid to gain market share, as ride hailing apps and restaurant delivery services did in the early days. As restaurant delivery prices rise, the new cheap and fast grocery delivery options will become more attractive.
Absent audited financials, it’s unclear if Getir or its competitors are profitable. They likely aren’t, and the current pricing structure is likely unsustainable. However, as long as the industry remains unconsolidated and the players are flush with investor cash, the discounting will likely continue.