In brief: Walmart subsidiary Jet is shutting down its fresh food delivery business in New York City after launching it just a year ago. Given Walmart’s recent success with its own branded grocery delivery service, the development isn’t too terribly surprising.
A source familiar with the matter told Bloomberg that the shutdown will result in the loss of between 200 and 300 jobs. Jet will continue to sell dry groceries and will still fulfill existing fresh orders that have already been placed.
The development isn’t entirely surprising. Three others familiar with the matter said the service has struggled since launch. Some key executives left the company and in recent months, the service hasn’t been able to stock some fresh items like strawberries, bananas, seedless grapes and avocados.
The cost of doing business in the country’s most densely populated city also forced Jet to raise prices, we’re told. One person said the company was losing about $20 per order. That’s far from a sustainable business model, even for a new service desperate to gain market share.
Jet has been far less of a priority for Walmart than most anticipated when it paid $3.3 billion for the company in 2016. Indeed, with Walmart’s recent success with its own grocery delivery service, Jet’s fresh food venture was even less of a concern.
Walmart in an e-mailed statement to Bloomberg said they learned a lot by testing Jet fresh grocery delivery, adding that they’ll continue to test bold concepts that can offer convenience to customers.
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