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Gopuff Scaling Back Warehouse Operations

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Gopuff co-CEORafaelIlishayev (Gopuff, iStock)

Fast-delivery apps have closed or suspended operations in about 20 warehouses as a sign of a sector hangover from the pandemic era boom.

According to insiders, Gopuff is changing operations in 22 warehouses nationwide to evaluate how it operates more efficiently. About half of the facility is closed and the other half is under assessment and may be in a disorganized location. All warehouses were processing small orders.

Gopuff has been on this path before. The company has evaluated warehouse profitability and facilities that are not doing enough business in the past, and is reportedly planning a new warehouse earlier this year.

However, it is not the end time of the high-speed delivery application. The company still has more than 600 fulfillment centers around the world, more than double what it was a year ago. Gopuff also has $ 2 billion in capital to survive difficult times.

The times are tough for the entire industry. During the pandemic, high-speed delivery companies surged in major cities, providing “within 15 minutes” delivery services to billboards and bus stops. However, the pandemic e-commerce boom has begun to slow, and rising interest rates have surprised investors who want to generate more cash.

In March, Gopuff fired 3% of its global team, bringing the total to over 400. Last week, competitor Gorillas fired 300 people and rival Getir fired more than 4,000 people, or 14% of the workforce.

Industry is also facing Strengthening scrutiny From landlords and politicians, some are sour to startups.In New York City, companies Allegedly combined Take advantage of vacant storefronts and sweet leasing to secure 150-200 retail spaces and build a major foothold during the year.

Landlords disagree, saying that “dark stores” aren’t very attractive in residential areas that aren’t accessible on foot and can’t bring in the noise of delivery vehicles. Gale Brewer, a member of the city council, is reportedly considering legislation for these companies that act as de facto warehouses in areas of the retail zone.

This is a challenging moment for fast-delivery apps, but it’s also the first major challenge for the industrial real estate sector since the pandemic boom.Amazon, one of the largest industrial real estate users in the country Trying to sublease 10 million square feet Of the warehouse space after accumulating an excessive amount. One source told Bloomberg that it could look like a sublet of up to 30 million square feet.

[Insider] — Holden Walter-Warner

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