Walmart ends grocery delivery partnership with Deliv

WASHINGTON: Walmart Inc and logistics firm Deliv pulled the plug on a key same-day grocery delivery partnership, dealing a setback in its race against rival Amazon.com Inc to deliver groceries to customers’ homes.

The world’s largest retailer began bolstering its partnerships with third-party courier firms to reach consumers in 100 United States cities last year, after failing to use Uber and Lyft to deliver groceries, and struggling in its attempt to use its own employees to deliver goods.

Deliv, which was one of Walmart’s earliest partners with pilot programmes in Miami and San Jose, served the retailer with a 90-day termination notice, and the two companies stopped working with each other late last month, said two sources.

Walmart confirmed the previously unreported decision but said it was still partnering with seven delivery firms, including DoorDash and Postmates, four of which it signed up last month.

People familiar with the Walmart partnership with Deliv said the Deliv drivers had to frequently wait 40 minutes or more to collect grocery orders when they showed up at the store.

One reason for that, they said, was because Walmart gave a priority to customers over delivery drivers during regular hours, which complicated the tie-up.

The store operations at Walmart “were a huge problem”, said a source, adding that the retailer could not “process online grocery orders fast enough”.

Walmart spokesman Molly Blakeman said the retailer and Deliv mutually decided to end the partnership.

“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 programme at this time.”

Blakeman said same-day grocery delivery was currently available in 800 of its more than 5,000 US stores and warehouse clubs, and the retailer planned to add 800 more this year.

Deliv offers scheduled sameday deliveries through gig drivers, a model that can work well with faster order processing and a better ability to predict demand and robust volumes.

Walmart was now working mostly with restaurant delivery firms that delivered an order as and when it is generated, said one of the sources.