Freshdirect Case Study Report Essays

1875 Words Mar 11th, 2013 8 Pages
Fresh Direct Case Study Report
Fresh Direct is a web-based supermarket that delivers fresh produce and meals to customers in New York City metropolitan area. Customers can order prepared meals from the website, www.freshdirect.com. Fresh Direct is in the online grocery store industry.
BACKGROUND
FreshDirect was found in 1999 by Jason Ackerman, Steve Druckman and Joe Fedele as an online alternative to traditional grocery stores. The company specializes in delivering a variety of over 3,000 items such as fruits, vegetables, seafood, prepared entrees and sides, coffee, meat products, deli and cheese products, and bakery items (Goldberg, 2010). The company provides same day and next day delivery to over 600,000 customers in New York
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After being unprofitable for the first several years, FreshDirect begin making a modest profit in 2008. The Private Company Database (Fresh Direct Holdings, LLC, 2012) listed the following financial information for FreshDirect: * In 2003 the company generated $88,000,000 in revenues and had operating loss of $6,000,000. * In 2003 the company generated $124,000,000 in revenues and had operating loss of $1,500,000. * In 2003 the company generated $147,000,000 in revenues and had operating loss of $3,500,000.
FreshDirect was slowly increasing its revenues while reducing its losses until it finally became profitable in 2008. The company’s profit continued to increase until it reached an estimated $300 million in 2009; however, it seems as if it is difficult for the company to operate without outside help. In 2003, FreshDirect received $31 million in series A funding. Also, the Bronx Overall Economic Development Corporation gave approximately $3.5 million in grants and loans. Also, New York and New Jersey are competing over the company with subsidies (Powell, 2012). British supermarket retailer Wm Morrision purchased a $50 million stake in FreshDirect (Hamstra, 2011). FreshDirect hopes to provide its services to low-income customers. The company is also looking at expanding its customer base to include customers

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