- Walmart’s e-commerce outfit Jet is nixing its fresh-food grocery delivery service in New York City.
- Bloomberg’s Matthew Boyle was first to report that the Walmart-owned subsidiary is ceasing its fresh-food business.
- “Jet will continue to offer millions of dry grocery and general merchandise items to customers in major metros like New York City,” a Walmart spokesperson told Business Insider.
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Jet is ceasing its fresh-food delivery business in New York City, just a little over a year after the Walmart-owned subsidiary launched the experimental grocery service.
Bloomberg’s Matthew Boyle broke the news that the company is set to cancel the service, reporting that Jet struggled to keep prices low and fresh products in stock. According to a Walmart spokesperson, the process has been a valuable learning experience for the retailer.
“We learned a lot by testing Jet fresh grocery delivery in New York City, and we recognised the important role our stores play in providing an efficient way to offer groceries to customers through pickup and delivery,” a Walmart spokesperson said in a statement to Business Insider. “We will focus our grocery pickup and delivery in markets where we have this incredible opportunity.”
According to Bloomberg, Jet will shut down its warehouse in the Bronx, resulting in 200 to 300 people losing their jobs. Walmart acquired the online retailer for $US3.3 billion back in 2016, in order to bolster its e-commerce capabilities and boost Walmart.com. Today, Jet cofounder Marc Lore is the CEO of Walmart’s US e-commerce business.
But within Jet’s Hoboken, New Jersey, headquarters, there have been indications of turbulence. The company saw a series of high-profile departures among its upper ranks this summer, including eight vice presidents, five senior directors, and 84 overall Jet employees from its Hoboken, New Jersey, base. Jet’s Hoboken location houses a workforce of over 2,000 across Walmart’s e-commerce business, and 500 additional employees have signed on to work there since June.
A Jet employee told Business Insider’s Hayley Peterson that the company was “fighting through the chaos and trying to make sense of all of it as people are leaving.”
Jet customers in New York City aren’t entirely out of luck when it comes to grocery delivery, however. The spokesperson added that Jet will continue to “offer millions of dry grocery and general merchandise items to customers in major metros like New York City.”
“And, we’ll continue to test bold concepts that can offer convenience to customers,” the spokesperson said.
Jet’s decision to cut back on its delivery offerings is just the latest shakeup within Walmart’s e-commerce arm. The retail giant will sell off online clothing brand ModCloth and has also reportedly considered selling menswear retailer Bonobos. There has been speculation that Walmart may also be spinning off its exclusive concierge shopping service JetBlack, as it is reportedly losing $US15,000 per member on an annual basis.
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