An email interview with Gorillas which updates us on how the speedy grocery delivery company's assault on the UK market is going and how it's combating the current difficult economic circumstances.
Gorillas has been in the UK for just over a year. What have been the highlights?
Since launching in London in March 2021, Gorillas has achieved a number of business milestones:
• The fastest ever European start-up to reach a $1 billion valuation.
• Partnered with numerous international supermarket chains including; Tesco in the UK, Casino Group in France, Jumbo in the Netherlands and Alnatura in Germany.
• Worked with over 50 local suppliers from across the UK, including the likes of H.G. Walter, Minor Figures, Strong Roots and Hackney Gelato. Partnering with the latter to launch a co-branded ice cream exclusively available on the Gorillas app.
• Gorillas delivered over eight million products to UK consumers in its first year of operations.
• Partnered The Felix Project to donate 461,910 meals to those in need, saving 193 tonnes of food from going to waste,
• Partnered with Too Good to Go to save a whopping 28,620 'Magic Bags', offsetting 71,550kg of CO2 emissions, equating to 14 flights around the world or 12.6 million smart phone charges.
• Joined forces with War Child, and award-winning distillery The East London Liquor Company (ELLC), to launch a special-edition cocktail on the Gorillas app, to support children living in conflict.
Can you update us on your deal with Tesco? How is that partnership evolving? Are you looking to strike other deals with major supermarkets?
Our partnership with Britain's largest retailer, Tesco, marked a global industry-first within both the rapid delivery and retail industries.
It represented the first partnership between a quick commerce company and a traditional grocery retailer that included co-located physical warehouses within Tesco's existing retail stores.
Together, Tesco and Gorillas are able to leverage the existing networks of Tesco's strategically located UK stores with Gorillas' rapid delivery business model for an even better consumer experience. Since the launch of the pilot project at the end of last year, we have expanded to 3 locations. We are also experiencing a strong performance of our order volume.
Since partnering with Tesco's in 2021, Gorillas has also announced partnerships with international supermarket chains; Casino Group (France), Jumbo (Netherlands) and Alnatura (Germany).
What is the size of Gorillas' operation in the UK? In terms of personnel and which UK cities you are now operating? Any plans to launch in more UK cities?
We do not disclose the size of our local workforce however Gorillas currently operates 33 warehouses across London & Manchester. In London we have seen higher growth and profitability potential than in other secondary cities in the UK, therefore our strategy for future growth will remain focused in the capital.
How is Gorillas combating the current tough economic circumstances?
• Indeed, we, together with the rest of the industry, are now operating in a difficult and complex global environment, with rising inflation, a war on European soil and massive supply chain shortages.
• This is why we have increased our focus on our key markets of Germany, France, the Netherlands, the UK, and the US (New York City).
• And we are redoubling our efforts to provide our customers with an even better shopping experience while strengthening our Gorillas brand.
• We are looking for ways to offer our customers more of what they want, while creating new revenue streams. This is perfectly exemplified with the very recent launch of our private label brands.
• Following a deep and data-driven analysis of our more than 16 million customers orders, we have developed 4 private label brands that will fulfill our customers' demands by offering high quality products at a fair and competitive price.
• And we are delighted to see that our customers are proving us right - the first batch of our private label brand,
Gorillas experienced seismic growth during Covid. Can you maintain this?
• In October of 2021 we made the strategic decision to shift from a hyper growth strategy to one focused on sustainable growth and profitability.
• At this point we are not aiming to grow at all costs, but rather lay the foundations to become a sustainable and profitable company that can be at the forefront of quick commerce for many years to come.
• And, with more than 25 warehouses and 65% of our customers already being profitable, we are convinced that we will achieve these goals soon.
• As a matter of fact, we believe that in our core countries our operations will be profitable in approximately 3 months from now, and, as a group, we will be operationally profitable in around 12 months from now.
The UK market is a key market for Gorillas. When do you expect to make a profit in the UK? What per cent of your group revenues come from the UK?
Although we do not speculate on the exact time frame for profitability regarding individual markets, as highlighted in question 5, we believe that in our core countries, our operations will be profitable in approximately 3 months from now.
Can you update us on your co-branded banana, pecan, caramel ice cream with Hackney Gelato? Will we see more of these deals?
We launched the co-branded Banana, Caramel & Roasted Pecan gelato with local partner Hackney Gelato in May. It is made using the traditional Italian slow churning techniques, fresh milk and cream, and real bananas and pecans - and it has been a huge success with our customers.
Since launching it has become a top performer in the ice cream category, and as we're always striving to provide our customers with what they want in minutes, we certainly hope to see more of these partnerships in the future.
How many products is Gorillas delivering in the UK every month?
We do not disclose monthly figures however as highlighted in question 1, Gorillas delivered over eight million products to consumers around the UK in its first year of operations.
How do you see the rapid grocery market developing in the UK and the rest of Europe?
• At Gorillas we are changing the way our users experience grocery shopping. It is no longer an obligation, but a fun activity, with easy and fast access to essential needs.
• After testing Gorillas, our customers immediately understand the value of our service in terms of convenience. They see that we are able to save them a lot of time, while having access to super fresh products, thanks to our optimized supply chain.
• We have created a new consumer behaviour that goes beyond the pandemic.
• Quick commerce is not just transforming the grocery industry, it also has an incredible market potential. In other words: what we are seeing right now is just the beginning, we are here to stay.
Gorillas has recently announced job cuts of 300 people. How many of these are in the UK?
Recently Gorillas made the extremely difficult decision to adjust the size of its global workforce to reach sustainable maturity. Sadly this development affected a number of global staff members based in the UK, however we are not in a position to comment further regarding this matter.