2024-01-09 17:30:45
Online supermarket Picnic is not yet making a profit. Since the company started delivering groceries in Amersfoort in 2015, it has been racking up losses. But investors in the online supermarket – which has no brick-and-mortar stores – are confident that the newcomer will be a financial success. In December they once more invested a lot of money in the company: 355 million euros.
After a first financing round in 2015, this is the fourth time that Picnic has received a major capital injection. In 2017, investors invested 100 million in the company, in 2019 250 million and in 2021 even 600 million. These investors include the German supermarket chain Edeka (since 2018) and the Bill & Melinda Gates Foundation, the investment fund of Microsoft founder Bill Gates and his former wife (since 2021).
A number of wealthy Dutch families have also invested money in Picnic. This includes the Fentener van Vlissingen and De Rijcke families, the founder of the Kruidvat drugstore chain. They have been involved with Picnic from the start.
Online bigger than Jumbo
More than eight years following its founding, Picnic has become a significant party. Turnover was 30 percent higher than in the corona year 2021 and 40 percent higher than last year: 1.25 billion euros, the lion’s share of which was achieved in the Netherlands. By comparison: Jumbo, the second largest supermarket chain in the Netherlands, had a turnover of around 11 billion euros last year. According to co-founder Michiel Muller, Picnic is bigger than Jumbo in the online field. Albert Heijn is the largest online supermarket in the Netherlands. The Dutch supermarket sector as a whole grew by 7.6 percent last year.
Picnic now delivers, Muller reports, groceries in more than 120 Dutch municipalities and has more than a thousand delivery vehicles driving around. In principle, approximately 80 percent of all Dutch people can order groceries from Picnic. This is not possible in areas where relatively few people live. Delivering groceries profitably is not possible there.
In regions where Picnic has been delivering for a long time, has many customers and robotized distribution centers, it is now profitable, according to Muller. Such a center is in Utrecht. They are under construction in Dordrecht and Oberhausen, Germany. Profit is still a long way off for the entire company. In 2021, Picnic suffered a loss of 115 million euros, in 2022 of 209 million. Picnic will announce the extent of the loss last year later this year.
Investing in expansion
The losses are a result of the large investments that Picnic is making: in large distribution centers, in smaller hubs and in robotization. “In this industry, the cost outweighs the benefit,” says Muller. “We start with small centers. As more customers come, these centers will become larger. It makes little sense to only serve a few customers from a large robotized center.” Viewed in this way, Picnic is very similar to online department store Bol.com: it wrote red figures for years because it invested a lot in expansion.
Picnic has set its sights abroad. It has been active in Germany since 2018. The electric Picnic carts drive around in Hamburg and Berlin, among others. Leipzig and Munich are on the agenda for this year, says Muller. In 2021, Picnic started in France, in Lille. Picnic now also delivers in the south of Paris. Picnic reports that it is growing faster in Germany and France than in the early days in the Netherlands. According to Muller, Picnic is also growing in areas such as Amersfoort, where it has been active for years.
Picnic will continue to grow, Muller thinks. “Compared to electronics and clothing, ordering groceries online is not that big of a deal. He thinks that families in particular will opt for home delivery more often in the future. Picnic now has 15,000 employees, says Muller. The majority are runner (delivery person) or shopper (packer). The runners usually work part-time, the shoppers full-time.
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