Walmart and Deliv, the logistics startup, have ended a same-day grocery delivery partnership, which is seen as a blow to Walmart’s efforts to take on Amazon in bringing groceries to consumers via speedy delivery.
According to a report in Reuters citing two people familiar with the situation, Deliv, among the earliest delivery partners of Walmart, ended the relationship via a ninety-day termination notice. The two companies then ended their relationship at the end of January. Walmart told Reuters that the relationship is over and that it is partnering with seven other companies for delivery, including DoorDash and Postmates. Reuters noted that four of the delivery deals were inked in January.
The sources told Reuters that Deliv was frustrated because drivers had to often wait around 4o minutes or longer to get the grocery orders when they arrived at Walmart for pick up. Walmart prioritizes customers over the delivery drivers during regular business hours, which results in the drivers waiting. One of the sources told Reuters the store operations of Walmart was a big issue, with the source saying Walmart couldn’t process the online orders quick enough.
Walmart spokeswoman Molly Blakeman told Reuters the two sides mutually agreed to end the arrangement. “As with any pilot, the intent is to learn. 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,” she said. The spokeswoman noted same-day delivery is available in 800 of its 5,000 stores in the U.S. with plans to expand that by 800 more in 2019. Both Reuters’ sources noted that order volume in many of the markets Deliv was being piloted was low, with orders having to be delivered far away, which caused losses for both parties. “When the partnership with Deliv was struck, the hope was that demand will be stronger than it is now,” one of the sources said in the report. The Walmart spokeswoman countered that, saying there weren’t any issues with the order volume.