Ultrafast Grocery Sales Hit the Skids

Ultrafast Grocery Sales Hit the Skids

This week in grocery, one ultrafast delivery service shutters while another becomes stronger than ever.

Sydney, Australia-based 10-minute grocery delivery service MilkRun is shutting down, The Australian Financial Review first reported Tuesday (April 11). Founder and CEO Dany Milham informed staff that, unable to raise sufficient capital to keep the company going amid losses, it would cease operations by the week’s end.

“Since we announced our structural changes in February, economic and capital market conditions have continued to deteriorate, and while the business has continued to perform well, we feel strongly that this is the right decision in the current environment,” Milham said in an email to employees, per the report.

The company launched in September 2021, and its delivery service operates in Sydney and Melbourne.

MilkRun is not the only on-demand delivery firm in those cities to bow out amid the challenges of the current economic climate. The Sydney Morning Herald reported Friday (April 7) that DoorDash’s DashMart dark store rapid delivery arm shut down in the country about four months after its Australian launch.

The service operated in Sydney, Melbourne and Brisbane, and DoorDash had planned to open dozens more dark stores this year, according to the report.

“We are always evaluating where to invest in a way that supports the business and meets the needs of the communities we serve,” Rebecca Burrows, DoorDash’s general manager of Australia, New Zealand and Canada, told the outlet. “As we continue to invest in grocery and convenience in Australia, we have decided to focus our efforts on prioritizing selection for consumers and supporting our merchants and partners.”

Last month, in the U.S., it was reported that ultrafast grocery delivery firm Food Rocket, backed by convenience retail giant Couche-Tard, had shut down.

Getir Touts Europe’s Largest Ultrafast Delivery Network

While many ultrafast firms are closing shop, others are taking advantage of the opportunity to consolidate. In December, it was first reported that Turkey-based quick-commerce firm Getir was acquiring Berlin’s ultrafast startup Gorillas, with help from investors. Now, the combined company has created the largest ultrafast delivery network in Europe, according to London Loves Business.

“Since the acquisition, we have had one clear goal in mind: Getir and Gorillas — stronger and better together,” Getir Regional General Manager Turancan Salur said, per the report. “Today’s announcement exemplifies how leveraging the synergies of both organizations can lead to not just the biggest and most efficient store network for ultrafast grocery delivery, but also one that will significantly increase the product range and service quality for our customers.”

Grocery Inflation Finally Eases in April, but Consumers Are Not Optimistic

In March, grocery prices finally declined slightly for the first time in this years-long inflationary period.

According to Consumer Price Index for All Urban Consumers (CPI-U) data released by the U.S. Bureau of Labor Statistics (BLS) Wednesday (April 12), food at home (i.e., grocery) prices fell 0.2% in March relative to February.

Yet, although food prices may not have climbed further in that time, and even saw a slight decrease, consumers do not believe that grocery inflation is getting better. Rather, they continue to expect grocery prices to climb for the foreseeable future.

Research from PYMNTS’ study “Consumer Inflation Sentiment Report: The False Appeal of Deal-Chasing Consumers,” which drew from a survey of more than 2,100 U.S. consumers, found that 70% expect grocery prices to continue to increase over the next year. In contrast, only 21% expect prices to remain the same, and just 9% predict a decrease. Plus, the average consumer does not expect inflation to return to normal until the end of 2024.