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Delivery Hero Offloading Struggling Asian Markets
Kroger's cold chain delivery, Yelp combats fake reviews, holiday hiring
Anyone looking to pick up a few struggling delivery brands in Southeast Asia? Delivery Hero is looking for a buyer, and if you’ve got a spare billion euros, maybe you can beat out Grab! If that’s not enough news, we’ve got some innovations from Kroger, new data from Yelp on fraudulent reviews, and a low-down on who’s hiring holiday workers.
Delivery Hero May Divest in Asia
Kroger Keeps Innovating in Grocery Delivery
Chart Time | Yelp’s Suspicious of Your Reviews
Holiday Hiring Starts Early
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3PD | Delivery Hero Looks to Divest Asia Business to Grab
Delivery Hero may operate myriad delivery brands across the globe, but it appears the Berlin-based company is approaching a serious retrenchment in Asia. The company is close to a deal to divest the majority of its Foodpanda operations — including the Singapore, Cambodia, Malaysia, Myanmar, Philippines, Thailand and Laos markets — to Singapore’s Grab. The transaction is rumored to be valued at approximately €1 billion ($1.07 billion); Delivery Hero would likely retain control of operations in Bangladesh, Hong Kong, Pakistan and Taiwan as part of the deal.
The Big Picture: While Delivery Hero is eking out mild profitability, largely through severe cost discipline, Asia has proven to be a tough market for it to crack. Not only are its margins consistently lower in that region, it’s recently seen declining GMV and segment revenue, as it battles the dual headwinds of continued Covid-related issues plus exchange rate instability. In Q2, the company’s GMV in Asia shrunk 5% (charted below,) while it registered growth of 15% in Europe and MENA, and 11% in the Americas. Foodpanda selling out to Grab gives the latter company a near monopoly in many of those markets, although Deliveroo still ekes out a small share in countries like Singapore. Not only will the divestiture improve Delivery Hero’s free cash flow, it will give it a fresh war chest for growth markets like Saudi Arabia.
GROCERY | Ralphs & Harris Teeter Keep Up on Delivery Innovation
Kroger, the nation’s largest traditional grocer, is keeping the pressure up in the delivery sector. In California, its Ralphs and Food 4 Less subsidiaries are now accepting SNAP and EBT payments for delivery orders; tapping in to new benefit dollars right as the gov slims down Covid-era SNAP check sizes. The company is complementing that roll out with the launch of OptUP, an online nutrition rating program meant to nudge consumers towards healthier options. On the other coast, its Harris Teeter brand is launching improved grocery delivery in the D.C. region. The program aims to never break the cold-chain, going directly from Ocado-powered semi-automated warehouses, to temperature controlled vans, to dry-ice packed bags awaiting customers.
The Big Picture: Kroger has proven itself a particularly innovative player when it comes to delivery and pickup; it was the launch partner for GM Brightdrop’s Trace e-cart, which follows pickers around the store as they fill the automated machine with orders; a new version will adds smart package locker-like functionality; where customers can retrieve their orders directly from an assigned cubby. These moves keep Kroger neck and neck not only with 3PDs like DoorDash, Uber Eats (which just launched its own SNAP / EBT payments) and Instacart, but also with Albertsons — the grocer it still hopes to acquire for $24.6 billion.
CHART TIME | Yelp’s Suspicious Review Index
Yelp wants you to know that it takes suspicious restaurant and retailer reviews seriously, that’s why it started publishing Compensated and Suspicious Activity Consumer Alerts. Since 2012, the review company’s software has apparently flagged 4,900 businesses, which honestly does not sound like that much given the U.S. alone has 6.1 million businesses (or a whopping 31.5M if you want to include sole proprietorships.) Yelp seems to be helpfully flagging about 100 bad actors per quarter; note the Q3 2023 data is incomplete.
LABOR | Holiday Hiring Season Already?!
This weekend marks the official start of autumn, which means one thing: it’s time to start freaking out about the holidays! Halloween, Black Friday (err, Thanksgiving,) Hanukkah, Christmas, Kwanzaa, Diwali — whatever you celebrate, you’re gonna want a bunch of new stuff! Retailers and deliverers are already starting to plan the hiring surge it takes to keep up: Amazon is hiring 250,000 season workers; Macy’s wants 38,000; Target is looking for 100,000. Competition is getting fierce as not only do these temp jobs offer better day than usual (up to $28/hr in certain markets,) some companies are offering as much as a $3k sign-on bonus to hit their targets.
The Big Picture: The headline numbers are impressive, but you can tell more about a company’s prognosis by comparing the stats to last year’s count. Amazon is hiring a record crop, 100,000 more than in 2022, as it looks to fill its 50 new fulfillment centers ahead of an October Prime Day event. Macy’s headcount is down from 41k last year, while Target’s is flat. Other players are yet to announce their holiday hiring surges: expect UPS to shortly launch a Brown Day; last year it used that single day hiring bonanza to fill 60,000 of its 100,000+ season positions.
A Few Good Links
Nonprofit farmers’ markets test delivery options in L.A. Starbucks opens coffee innovation center in China. H-E-B plans new stores in DFW. White Castle launches in-app delivery powered by Uber Direct. MealPal pushes reusable packaging. Dog Haus, Blaze Pizza, Wetzel’s Pretzels leadership create new fast casual taco concept in L.A. FedEx picks up volume from UPS and Yellow. Hershey’s hires Amazon exec at first CTO. Walmart pushes employees to make deliveries. Can c-stores get into catering? (
Yuck.) Mapbox closes $280M series E. HomeZone switches to Package.ai to improve failed delivery rate. Nation’s most affordable automotive option unsurprisingly proves popular with pizza delivery workers. Austin’s fast-growing Ziki (10 Greek-Mexican fusion locations and counting) turns to automation to fuel its ambitions.
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