Foodora closes dark stores in Finland as online grocery challenges persist

Small businesses in Finland’s online food retail sector are struggling, as evidenced by the closure of Foodora’s grocery stores, known as dark stores, by the end of this week. In these locations, consumers cannot shop directly; instead, employees pick items and deliver them. Earlier this year, another online grocery service, Kauppahalli24, ceased operations, and Norwegian grocery retailer Oda shut down in Finland after just a year and a half.

Moving forward, Foodora will shift its focus to delivering grocery orders from partner stores only and is piloting delivery services with S-Group’s supermarkets in Oulu and Kuopio. Anni Ahnger, Foodora’s business director, noted that the company is better off concentrating on its strengths in efficient and rapid delivery, although Foodora Market stores will continue to operate outside Finland.

Challenges such as sparse population and long delivery distances in Finland have hampered performance, particularly since consumer behavior changed post-COVID. During the pandemic, online grocery shopping surged, leading to inflated expectations, but growth has since stabilized with less than three percent of food purchases made online.

In contrast, Wolt, another food delivery service that operates 17 grocery stores across Finland, continues to thrive. Oscar Nilsson, Wolt’s Finnish country manager, believes that online grocery shopping is still in its infancy in Finland and expects substantial growth soon.

The future of online groceries will also depend on purchasing power and regulatory changes. A proposed law to allow alcohol delivery, currently facing criticism from health experts, could influence the sector. Both Nilsson and Ahnger see the density of residents as a larger factor impacting the success of online grocery shopping in Finland compared to other European countries.