Fresh Direct is rambling and bleeding money as its Turkey-based parent company is embroiled in a fight for its own survival, putting the future of the pioneering online grocer at risk. The Post reported that.
The Bronx-based company, whose colorful trucks have weaved through New York City traffic for more than two decades, has been busy hiring a new CEO since November after two previous bosses resigned within months of each other. “There is a lot of uncertainty for Fresh Direct,'' according to a person familiar with the situation.
FreshDirect Inc. secretly imposed a 50-cent congestion fee on all deliveries below 60th Street in Manhattan, as the Post exclusively reported. That's about $600 a month and at least millions of dollars in losses. Sources say annual sales are as high as $1 million.
Now, “the clock is ticking for FreshDirect,” said a former investor in the company.
Industry consultant Bert Flickinger said the company has an estimated 50,000 customers in Manhattan and delivers in the five boroughs and other mostly affluent parts of the metropolitan area.
Fresh Direct has recently reached out to industry experts to assist in the company's restructuring efforts, according to an executive with knowledge of the situation.
FreshDirect was already in severe financial trouble when Stop & Shop's parent company, Dutch owner Ahold Delhaize USA, sold the company to Istanbul-based Getil in 2023.
The fast grocery delivery service, a darling of the pandemic, was once worth $10 billion and had high hopes for the Big Apple icon.
The startup, co-founded by Nazim Tharoor in 2015, appointed former Walmart e-commerce executive Sloan Edelston as CEO of FreshDirect, and a year ago brought in rising star Hatice Evren to lead Getil's U.S. operations. Promoted to oversee Fresh Direct.
However, things quickly unraveled. Mr Eddleston resigned in May last year, followed by Mr Evren about six months later.
Eblen did not respond, and Eddleston declined to comment.
Eddleston, whose LinkedIn profile still lists him as CEO of FreshDirect, said he was concerned that the company was running out of cash and that Getir didn't have the wherewithal to invest in the company. a source familiar with the matter told the Post.
Evren said his tenure, which included serving as Tharoor's chief of staff, had been a “roller coaster.”
The Istanbul resident said on LinkedIn that her decision concludes “an important chapter in my life, marked by a transformative five-year journey at Getir and an incredible year at FreshDirect.” .
Meanwhile, Getil faces a crisis of its own. In June, the company exited six European countries and all of its U.S. operations except Fresh Direct in order to secure $250 million in funding from Abu Dhabi wealth fund Mubadala Investment Company.
But last week, Tharoor claimed: post X reported that an Emirati fund was orchestrating an “illegal coup” to force him out of the company.
“At the end of the day, Getir is underwater, and so is FreshDirect,” a former senior FreshDirect executive told the Post.
Getir and FreshDirect did not respond to repeated calls and emails from The Post.
FreshDirect is loved by thousands of New Yorkers, some of whom have been with us since our inception 26 years ago, but it's no longer a new concept.
It faces increasing competition from other delivery services such as Doordash, Instacart and Amazon.
In 2018, an expensive move from its starting point in Long Island City to a larger facility in the Bronx contributed to financial difficulties.
When it was put up for sale a year later, the company couldn't find a taker.
Ahold Delhaize USA finally made a bid in 2021 after Fresh Direct could barely keep up with all the new business driven by the pandemic.
But as lockdown shoppers were once again allowed to wander freely through supermarket aisles and demand waned, Ahold was left scrambling to unload Fresh Direct.
Under Ahold, FreshDirect exited the Washington, D.C., and Philadelphia markets, as well as some communities in Virginia and Maryland, and focused solely on the New York metropolitan area.
As The Post exclusively reported, the Dutch conglomerate ultimately had to pay Gettil to be taken off its balance sheet.
Terms of Getir's acquisition were not disclosed, but industry consultant Brittain Ladd said Ahold paid $151 million for Getir and invested an additional $30 million in the Turkish company.
According to Ahold's fourth-quarter 2023 financial results, the company lost about $270 million on the sale of FreshDirect.
Under Ahold, FreshDirect exited the Washington, D.C., and Philadelphia markets, as well as some communities in Virginia and Maryland, and focused solely on the New York metropolitan area.
At the time, the company said it would focus on its core New York subway market.
