In its quest to surpass Amazon.com in the race to grocery supremacy, the world's largest retailer has hit a stumbling block. Logistics firm Deliv has served Walmart a 90-day termination notice, ending its same-day grocery delivery partnership.
Walmart has been stepping up its game in the grocery delivery scene, partnering with third-party delivery services to reach consumers in 100 U.S. cities. The retailer continues to push forward despite failed partnerships with Uber and Lyft, reported Reuters, and ineffective programs using its own employees for grocery delivery.
As one of Walmart’s earliest delivery partnerships, Deliv and the retailer had pilot programs in Miami and San Jose. The two companies stopped working together in late January, which Walmart’s Director, National Media Relations, Molly Blakeman, told Reuters was a mutual decision.
“As with any pilot, the intent is to learn,” said Blakeman. “And we ultimately came to the conclusion with Deliv that while their platform is a good delivery option, it was not the best fit for our program at this time.”
Deliv works by tapping into local networks of freelance drivers to deliver products same-day for a fee. The company operates in over 1,400 U.S. cities, partnering with a range of retailers including Home Depot and Kohl’s. In October 2018 the company raised $40 million in financing from investors including Alphabet Inc’s Google and United Parcel Service. In December 2018, the company signed up 20 new U.S. retailers, including Nike and Nordstrom.
Multiple problems arose from the onset of the partnership, Reuters noted. In many markets, order volumes were low and orders had to travel long distances for deliveries, resulting in financial losses for both companies—though this was disputed by Blakeman. Deliv can process and deliver thousands of orders each hour, but the San Jose Walmart would sometimes generate only a hundred orders a week. Sources reported that Deliv drivers often had to wait over 40 minutes to collect grocery orders, partially because Walmart gives priority to customers over delivery drivers during store hours. Store operations were said to be a “huge problem,” and online orders could not be processed fast enough, reported Reuters.
Walmart is still partnered with seven delivery firms, including Postemates and DoorDash, with same-day grocery delivery in 800 of its over 5,000 U.S. stores and retailer clubs, with plans to add 800 more stores this year.
Will this hiccup slow down Walmart’s planned grocery delivery expansion? Keep reading Deli Market News for developments.