FreshDirect, After Broken Eggs and Angry Customers, Stages a Comeback

On some level, FreshDirect’s struggles are a normal evolution: A start-up pioneers a new business, before well-funded imitators gradually overtake it. But the company’s future also represents a test of whether Amazon, with its deep pockets and vast logistical infrastructure, can dominate fresh food, a market in which regional companies like FreshDirect have historically thrived.

Last month, the supermarket chain Fairway, another New York institution, filed for bankruptcy for the second time in five years, blaming the increased competition from national retailers like Amazon and Trader Joe’s. In the fall, the asset-management arm of JPMorgan Chase, which led a $189 million investment in FreshDirect in 2016, discussed selling its stake with a handful of regional and national grocery chains, according to Mr. Flickinger, who said he had discussed the matter with some of the chains that JPMorgan approached. (He declined to name the chains; the talks were previously reported by The New York Post.)

Still, Mr. McInerney insists he is not worried about FreshDirect’s competitors. The company has been profitable in the past, though a spokeswoman declined to reveal any details about its current financial performance, except to say it is “showing double-digit revenue growth.” In 2017, FreshDirect generated $600 million to $700 million in sales, according to news reports.

Article source: https://www.nytimes.com/2020/02/21/business/freshdirect-grocery-delivery.html