FreshDirect is rudderless and bleeding money as its Turkey-based parent company is embroiled in its own battle for survival – putting the future of the pioneering online grocer in jeopardy, The Post has learned.
The Bronx-based company, whose colorful trucks have weaved through New York City traffic for more than two decades, has been scrambling to hire a new CEO since November after the previous two bosses resigned within months of each other – leaving a leadership vacuum and creating “a lot of uncertainty for FreshDirect,” according to a source with knowledge of the situation.
FreshDirect – which quietly inserted a 50-cent congestion pricing fee on all deliveries to below 60th St. in Manhattan to help offset the cost of recently installed tolls, as The Post exclusively reported – is losing at least several million dollars a month on about $600 million in annual sales, multiple sources said.
Today, the “clock is ticking for FreshDirect,” said a former investor in the company.
It has an estimated 50,000 customers in Manhattan, according to industry consultant Burt Flickinger, and delivers in the five boroughs and other mostly-affluent parts of the metropolitan area.
FreshDirect has recently been reaching out to industry experts to help with the company’s turnaround efforts, according to an executive with knowledge of the situation.
FreshDirect was already in dire financial straits when its Dutch owner Ahold Delhaize USA, the parent of Stop & Shop, sold the company to Istanbul-based Getir in 2023.
The fast grocery delivery service, a pandemic darling once valued at $10 billion, had high hopes for the Big Apple icon.
Co-Founded by Nazim Salur in 2015, the start-up named former Walmart e-commerce executive Sloan Eddleston as FreshDirect’s CEO and promoted a rising star – Hatice Evren – to lead Getir’s US operations and oversee FreshDirect a year ago.
But things quickly unraveled. Eddleston resigned last May, and Evren followed him out the door about six months later.
Evren did not respond and Eddleston declined to comment.
Eddleston had concerns that the company was running out of money and that Getir didn’t have the means to invest in the company, a source with knowledge of the situation told The Post.
Evren said her tenure – which included a stint as Salur’s chief of staff – was a “rollercoaster” ride.
On LinkedIn, the Istanbul resident described her decision as closing “an important chapter in my life – marked by a transformative five-year journey with Getir and an incredible year with FreshDirect.”
Getir, meanwhile, is facing its own crisis. In June, it pulled out of half a dozen European countries and all of its US operations with the exception of FreshDirect in order to secure $250 million in funding from the Abu Dhabi wealth fund Mubadala Investment Co.
But last week, Salur claimed in a post on X that the Emirati fund was orchestrating an “illegal coup” to muscle him out of the company.
“At the end of the day, Getir is underwater and so is FreshDirect,” a former FreshDirect senior executive told The Post.
Getir and FreshDirect did not return repeated calls and emails from The Post.
While FreshDirect is beloved by thousands of New Yorkers, some of whom have been customers since its inception 26 years ago, it’s no longer a novel concept.
It faces increased competition from other delivery services, including Doordash, Instacart and Amazon.
A costly move in 2018 from Long Island City, where it started, to a massive facility in the Bronx contributed to its financial woes.
A year later, the company couldn’t find any takers when it was put up for sale.
Ahold Delhaize USA finally bid in 2021 as FreshDirect could barely keep up with all the new pandemic-fueled business.
But when demand petered after locked-down shoppers were free to roam the supermarket aisles again, Ahold was desperate to offload FreshDirect.
Under Ahold, FreshDirect pulled out of the Washington, D.C., Philadelphia markets as well as some communities in Virginia and Maryland to focus solely on the New York metro area.
In the end, the Dutch conglomerate had to pay Getir to get it off its balance sheet, as The Post exclusively reported.
Terms of Getir’s acquisition were never disclosed but according to industry consultant Brittain Ladd, Ahold paid Getir $151 million and invested another $30 million in the Turkish company.
According to Ahold’s 2023 fourth quarter earnings results, it lost around $270 million on the divestment of FreshDirect.
Under Ahold, FreshDirect pulled out of the Washington, D.C., Philadelphia markets as well as some communities in Virginia and Maryland to focus solely on the New York metro area.
The company said at the time that it would focus on its core New York metro market.
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