Picnic, an Amsterdam-based online supermarket, has announced its first profitable quarter in the Netherlands, attributed to advancements in their robotised distribution centre in Utrecht. The company’s co-founder, Michiel Muller, credited enhanced efficiency for this achievement. This milestone reflects a significant step for Picnic, which has been focusing on growing its operations before automating processes to enhance profitability. Despite the achievement, the overall group continues to operate at a loss, highlighting the contrast between the Dutch success and the broader financial challenges.
In analyzing historical data, Picnic’s recent profitability in the Netherlands aligns with its strategic investments in automation. The company had previously reported substantial losses, which were expected given its rapid expansion and significant investment in new technologies and markets. Past reports indicated similar growth strategies, as Picnic expanded its service to Germany in 2018 and France in 2021. These expansions were accompanied by increased operational costs, which contributed to the losses reported in previous years. However, the strategic focus on automation appears to be yielding positive results in their home market.
Moreover, earlier reports showed that Picnic had raised significant funding, including €355M in the latest round from prominent investors like the Bill & Melinda Gates Foundation Trust and Edeka. This influx of capital facilitated the development of high-tech distribution centres and supported their aggressive growth strategy. While the company faced financial hurdles, the steady increase in turnover and the recent profitability in the Netherlands suggest that Picnic’s long-term strategy could be starting to pay off. The company’s net turnover rose by 34% to €1.2B, further indicating positive momentum despite the overall losses.
Strategic Investments and Growth
The co-founder Michiel Muller emphasized the strategic intent to grow rapidly before automating processes.
“We have always said that we want to grow quickly first and then automate. It is great that this is now leading to profitability in the Netherlands,”
he shared. The company invested significantly in robotised distribution centres in Utrecht and Dordrecht, which now handle 30% of the grocery orders automatically. This automation has been pivotal in improving operational efficiency and achieving profitability in the Netherlands.
Financial Performance and Future Outlook
Despite reaching profitability in the Netherlands, the overall company reported a loss of €220.6M last year, following a loss of €208.7M in 2022. However, the substantial growth in net turnover, particularly a 28% increase in the Netherlands, suggests a positive trajectory. Muller noted that the growth has outpaced the financial losses, and shareholders are supportive of the company’s strategy. The recent profitability milestone is a positive sign, but the company must continue addressing losses in other markets.
Picnic’s journey showcases the challenges and rewards of rapid growth and technological investments. The success in the Netherlands provides a model that could be applied to other markets to improve profitability. Evaluating the financial performance, it becomes evident that while the initial investments led to significant losses, the benefits of automation and efficient distribution are beginning to materialize. As Picnic continues to refine its operations and expand its automated processes, the company is likely to see more balanced financial results in the future.
For readers closely following Picnic’s progress, the company’s ability to turn a profit in the Netherlands is a promising development. It underscores the importance of strategic investment in technology and highlights the potential for future profitability in other markets. Investors and stakeholders will be keen to see if this success can be replicated beyond the Netherlands, reducing overall group losses and achieving sustainable growth.
