Dutch online supermarket Picnic has seen its losses go from 5.8 million euro in 2016 to 45.5 million a year later, due to 100 million euros of investments that allowed it to double its turnover to 200 million euros.
"Today's loss is tomorrow's profit"
The spectacular loss was entirely expected, said co-founder Michiel Muller: the gross loss in 2017 was 45.5 million euros, while the gross operational result (EBITDA) was positive: 13.4 million euros. A total of 61.8 million euros was spent on costs.
"Today's loss is tomorrow's profit," Muller responded to a question posed by Retailnews. The investments are turning out to be fruitful because in 2018, turnover doubled to 200 million. Still, Picnic is not growing as fast as it should: initially, the company was hoping for a tripled turnover. That expectation had to be adjusted downward in November.
Expansion in Germany and Belgium?
Picnic has been making big investments in the past year. According to Business Insider, the online supermarket collected 100 million euros from Dutch private investors in 2017 to allow for five new distribution centres, 2000 electric delivery vehicles and seventy hubs. Those hubs are operationally profitable by now, the retailer says.
In 2018, Picnic expanded into Germany, where the formula was treated to a warm welcome. Today, the online supermarket is active in Neuss (near Düsseldorf) and Mönchengladbach, but further expansion is planned. Interested "parties and people" are approaching Picnic from Belgium as well, says Muller to Distrifood, but whether there are any concrete plans to expand southwards is not yet known.
The formula was expecting to see its first profit by 2020, but that date has been postponed again and again. The company does not make any predictions about growth in 2019 yet either. There is a good chance the company will be investing in processes and working conditions, as Picnic has been targeted by labour union FNV.
The union complains about high work pressure and unsafe conditions in the fulfilment centres. Wages also need to go up, says FNV: Picnic does not pay its employees according to the collective agreement for supermarkets, as they should be doing according to the union.