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Analysis – European food delivery takes shape with Getir’s gorilla purchase By Reuters

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© Reuters. FILE PHOTO: Bikes for the Gorillas express grocery delivery plane in Rotterdam, Netherlands on February 8, 2022. Photo taken on February 8, 2022. REUTERS/Peruschka van de Woo/File Photo

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Written by Toby Sterling

AMSTERDAM (Reuters) – Getir’s $1.2 billion deal to buy rival Gorillas is a significant step toward consolidation in Europe’s food delivery market, as the companies struggle amid a post-COVID slowdown.

After expanding rapidly, these companies took a hit in March as a drop in demand prompted by shutdowns of deliveries and higher interest rates, while investors soured on loss-making tech companies.

Food delivery groups have begun to combine quickly, cut costs, and exit markets in which they have been weak, in their pursuit of profits.

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Business and industry watchers say the painful cutback will continue – but survivors are starting to see the first green shoots.

Mergers and cost-cutting to remove excess capacity are happening more quickly than expected, and unit economics, including order volume per delivery, are improving, said Citi analyst Catherine O’Neill.

But she said cost-of-living pressures in Europe remain a significant negative.

“We haven’t seen how these companies will weather the recession yet.”

Istanbul-based Getir and Berlin-based Gorillas were among several venture capital-backed retail firms racing during the pandemic to create “dark stores” — delivery centers in city centers used to quickly transport groceries to customers.

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The dark shop model is fundamentally different from that of more established groups such as Just Eat Takeaway and Uber (NYSE: Eats), which take restaurant orders and deliver meals, though they are often seen as competition.

Quick trade

The acquisition of Gorillas made Getir Europe’s largest express trading company.

Analysts said Getir was valued at about $8.8 billion in Friday’s deal, seven times more than Gorillas because of its strong position in Turkey where it is headquartered.

Gorilla and Jetter did not respond to requests for comment.

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Other consolidators are Berlin-based Flink and Philadelphia-based GoPuff, which operate in the US and Europe.

“In Germany we see direct competition from Guerrilla and Jeter. All the others are gone,” Flink’s spokesman Boris Radke said.

Flink operates 190 darkroom stores, compared to 180 for Gorilla.

Radke said Flink is thriving because of close partnerships with REWE supermarkets in Germany and Carrefour (EPA:) in France, both of whom are shareholders in the company.

Analysts believe that the dark store center generates revenue somewhere between 500-1000 orders per day.

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“We closed a few hubs that weren’t profitable, and we certainly put aside any kind of larger expansion plans” amid the economic downturn, Radke said.

However, he said, the number of profitable Flink hubs is growing, and sales are going up “consistently month after month”.

Less capital, less coupons

More than a dozen small European express trading companies have failed or been acquired since mid-2021.

Venture capital firms invested $125 million in the sector in two deals in 2022, down from $1.3 billion in 13 deals in 2021, based on PitchBook data.

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With less competition and less new capital coming into the market, the remaining companies in both grocery and food delivery have cut spending on coupons and promotions.

While most meal companies have experimented with the fast food business, both types of companies are now collaborating frequently, which is a sign of things to come.

Last month, Getir struck a deal with Just Eat Takeaway to include Getir groceries on the Takeaway app.

That would give Just Eat Takeaway additional high-margin orders, while Getir gets more deliveries and sales from its darkroom stores.

“I expect we’ll see more activity either in the form of mergers and acquisitions or deep business partnerships,” said Larry Elg, head of the food business at technology investor Prosus (OTC:), which owns a stake in Delivery Hero.

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While earnings may still be a long way off for the privately owned express business, all of Europe’s listed meal delivery companies have set formal targets for earnings before interest, taxes, depreciation, and amortization (EBITDA).

Just Eat said it’s already profitable before interest, taxes, depreciation, and amortization. Delivery Hero says it will get there in 2023 and Britain’s Deliveroo by the first half of 2024 at the latest.

Shares in the European delivery companies are down about 60% from a year ago, but they have been trading sideways since June.

Uber and DoorDash, both already positive in EBITDA on the strength of their US operations, say their European subsidiaries are growing.

“We continue to see strong demand for groceries, and we continue to see groceries as a driver of growth for our overall business next year,” Uber spokesman Caspar Nixon said.

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He said the takeaway grocery options are “completely available on the app, but we don’t think it makes sense to own the entire supply chain” as Getir does.

The negativity about fast trading has been exaggerated, says Sajal Srivastava, a founding partner at TriplePoint Capital, which provided project debt financing for Flink.

“Consumers are still using it. The numbers are still going up and the economy is getting better,” he said.

So “all the naysayers who say flash trade is over – no. It will be there and the data will show it.”

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Red Flags That Your Spouse Is Hiding Money (And What To Do About It)

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Marriage can be hard enough without one spouse hiding money from the other.

When financial infidelity occurs in the form of “hidden cash,” a marriage or a live-forever relationship can easily be ended.

The truth is About 30% of American couples suffer from financial infidelity. Other evidence shows that more than 75% of couples describe the hidden money situation as negative and common 10% of these scenarios end in divorce.

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US judge orders Norwegian Cruise Line to pay $110m for use of Cuba port By Reuters

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© Reuters. Norwegian American Airlines cruise ship Marina arrives in Havana Bay, Cuba on March 9, 2017. REUTERS/Alexander Meneghini/File/File Photo

Written by Brian Ellsworth

MIAMI (Reuters) – Norwegian Shipping Line (NYSE) has to pay $110 million in compensation for the use of a port confiscated by the Cuban government in 1960, a US judge said Friday, marking a significant milestone for Cuban Americans. Who are seeking reparations for the Cold War era. Assets confiscation.

The decision by US District Judge Beth Bloom in Miami follows her decision in March that use of the Havana Cruise Terminal constituted smuggling of forfeited property belonging to the plaintiff, Delaware-registered Havana Docks Corp.

The decision read: “The judgment is made in favor of Plaintiff Havana Docks Corporation and against Norwegian Cruise Line Holdings, Ltd.”

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“The plaintiff was awarded $109,848,747.87 in damages,” it says, adding that the Norwegian must also pay an additional $3 million in legal fees and costs.

Norwegian Cruise Line did not immediately respond to a request for comment.

Cuban President Miguel Diaz-Canel has sharply criticized the Helms-Burton Act, calling it an extraterritorial violation of international law.

Havana Docks also sued Carnival Cruise Lines (NYSE: ), Royal Caribbean (NYSE:) and MSC under the Helms-Burton Act, which allows US citizens to sue over the use of property seized in Cuba after 1959.

The ruling could fuel more lawsuits by Cuban exiles pursuing claims, worth $2 billion, according to one estimate, over asset seizures under late Cuban leader Fidel Castro.

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It may also serve as a reminder to multinational companies of the complexities that can come with doing business in Cuba.

In 2016, US cruise ships began traveling to Cuba for the first time in decades after a détente negotiated by former President Barack Obama eased some provisions of a Cold War US embargo.

But the Trump administration in 2019 ordered a halt to all such cruises amid efforts to pressure Cuba over its support for Venezuelan President Nicolas Maduro, Washington’s ideological foe.

The Trump administration has also allowed US citizens to sue third parties for using property seized by Cuban authorities, a provision of the Helms-Burton Act that every previous president has waived since the law was passed in 1996.

Havana Docs says Cuba, which has been under a US trade embargo for decades, has never compensated it for taking the drug.

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The four cruise lines sued in 2019 in the US District Court for the Southern District of Florida. Bloom in March held the companies liable for damages under the Helms-Burton Act, also known as the Libertad Act.

According to the US-Cuban Economic and Trade Council, a nonprofit organization that provides information on relations between the two countries, 5,913 validated claims related to property seized in Cuba represent an estimated liability of nearly $2 billion.

Forty-four lawsuits have been filed under Title III of the Helms-Burton Act, the organization says.

“For the current plaintiffs of Cuban descent, (the decision) will give them a moment of relief,” said John Cavulich, the group’s president. “It will give them a moment to say ‘You can run but you can’t hide,’” Cavulich said.

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Is a Royal Caribbean or Carnival beverage package worth it?

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An all-inclusive beverage package that gives you access to beer, wine, liquor, bottled water, soda, specialty coffee, and even shakes/juices may cost more than your cruise fare.

This is especially true right now when many cruise cabins are being sold at discounted prices while the drinks package prices have gone up.

Deciding whether to purchase a drink package is a challenge because you have to estimate whether you will be drinking enough to cover the cost. Or, more importantly, whether you’d spend more if you decided not to purchase a drink package.



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