Gopuff Could Shutter 22 Warehouses As Rapid Grocery Challenges Continue

Rapid grocery delivery startup Gopuff is looking to reduce its warehouse footprint as it continues to look for ways to cut costs after laying off hundreds of workers earlier this year.

Gopuff is planning to shutter 11 of its urban warehouses permanently and could shut another 11 after reassessing the locations, Insider reports. 

The rapid delivery service was formed in 2015 in Philadelphia by two former students of Drexel University. By 2020, it had expanded to more than 150 markets, and that year SoftBank Vision Fund led a $750M fundraising round for its parent company, GoBrands.

But like many of its competitors, it has experienced the squeeze as the demand for grocery deliveries has eased post-lockdown. Gopuff has more than 600 fulfillment centers around the world, an increase from 250 about 12 months ago, Insider reports. There are no plans to withdraw from any particular regions, however, and the locations closed are said to be low-volume.

Last year, venture capitalists were rushing to try and get ahead in the rapidly expanding quick commerce industry, and in New York City the companies rapidly grew to more than 100 locations.

But the fall has been just as steep as the rise for many of these firms.

Getir has laid off 4,000 staffers, while Gorillas let 300 workers go and Gopuff reduced its worldwide workforce by 3%. Other competitors, like 1520, have shuttered operations completely.

In March, 12 New York City Council members wrote a formal letter to the city's Department of Buildings, claiming that many of the rapid delivery startups were operating warehouses in spaces zoned for retail, asking the DOB to enforce zoning code to rein in the proliferation of so-called dark stores.