French food delivery startup Epicery will cease operations on Tuesday, marking the end of its nine-year journey in the industry. The startup, which focused on premium groceries and local deliveries, will have one last hurrah for its clients and local food businesses before shutting down.

In a message to customers, Epicery's team attributed the decision to the economic and financial challenges the company has been facing for several months, which it was unable to overcome despite its best efforts. The startup's struggles can be traced back to the inflationary period, which led customers to rethink their food spending habits. As a result, Epicery suffered significant losses, with a negative Ebitda of -€4.69 million in 2023, on sales of €2.57 million.

Ironically, Epicery reached unexpected heights during the COVID-19 pandemic, when France went into lockdown. The startup's success during this period led to Geopost/DPDgroup, the express parcel delivery branch of Groupe La Poste, taking a majority shareholding in the company in late 2021. However, in recent months, La Poste cut ties with several startups it previously invested in, including Stuart, which it sold at a significant loss.

In a statement, Geopost attributed the decision to cease Epicery's operations to an in-depth analysis of the startup's financial and operating performance. The company concluded that Epicery's short- and medium-term profitability had been severely impacted by developments in the food delivery market, a gradual post-COVID return to direct consumption from local shops, and strong competition in the catering segment.

The food delivery landscape in France has undergone significant changes since Epicery's launch in 2016. The startup's competitors, including Take Eat Easy, Deliveroo, and Uber Eats, have come and gone, while quick commerce players like Cajoo, Flink, Gopuff, and Gorillas have also exited the market. Despite this, Epicery managed to maintain a modest scale and visibility, with around 25,000 recurring customers and 1,100 local shops, mostly in Paris and Lyon.

However, Epicery's co-founder and CEO Édouard Morhange acknowledged that the startup's scale and visibility were not sufficient to justify its continued operation as a VC-backed business, especially after the Stuart synergies were lost. Morhange expressed pride in introducing local retailers to ecommerce over the past 10 years and is confident that they will continue to develop their digital sales in the coming years.

Morhange will remain active in the food sector, working on an ambitious new model that will enable the food industry to pursue its digitalization in France and abroad. Epicery's employees will receive support from Geopost's HR teams to discuss opportunities within the Group or to help them find new jobs.

French entrepreneur Nicolas Machard, whose food marketplace Pourdebon is also a subsidiary of Geopost, expressed confidence that Epicery's employees will soon land new roles. Machard also believes that Geopost and Pourdebon are still a great fit, mission-wise and economically, with Pourdebon on track to reach profitability in 2027.

Epicery's legacy is notable, with the startup sometimes bringing up to 10% or even 20% in sales to local shops it worked with. According to Elsa Hermal, who co-founded Epicery with Morhange and VC Marc Menasé before leaving operations in 2019, this was a significant milestone. Hermal, now a business coach and impact investor, believes that logistics businesses are complicated and challenging in terms of metrics, but that doesn't mean it can't be done.

In conclusion, Epicery's shutdown marks the end of an era in the French food delivery market. While the startup's struggles were ultimately insurmountable, its legacy in introducing local retailers to ecommerce and its impact on the food industry will be remembered. As the market continues to evolve, it wouldn't be surprising to see an Epicery-like model make a comeback at some point.