Delivery Hero concedes defeat in Germany

Delivery Hero has announced it is winding down its food delivery operations in Germany, only four months after relaunching the service in the country.

The Berlin-based food delivery firm Foodpanda will stop operating in six German cities including Cologne, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart, according to a press release.

The company will instead focus on piloting new product features in central Berlin and has also said it has plans to sell its Japanese unit Foodpanda Japan in the first quarter of 2021.

“Facing a very different reality now than we did entering these markets, it is with a heavy heart that we need to pursue other growth opportunities with larger potential,” Delivery Hero chief executive Niklas Östberg said.

“Despite having built up two fantastic Foodpanda teams showing great progress, it has become increasingly difficult to create true value for our ecosystem in these countries.”

READ MORE: Deliveroo shares jump 10% as Delivery Hero takes 5% stake

The company also said it couldn’t rule out job losses amid the change in operations, with Foodpanda staff hopefully moving to other roles within the group company. The company’s share price rose 6% after the news.

The announcement comes as positive news for Just Eat Takeaway (JET), which has a large presence in the country.

JET subsidiary, Takeaway.com, acquired Delivery Hero’s Germany operation in 2018, prompting Deliveroo to withdraw from the sector in 2019.

The online delivery space has seen a surging demand as a result of pandemic restrictions over the past 12 months, with many of the market’s biggest players taking advantage.

However, this has meant that competition has heated up and a number of companies have ceased operations or been purchased by rivals.

Delivery Hero made a £235 million investment into Berlin-based grocery delivery app Gorillas in a bid to take a piece out of the “quick commerce” space.

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