This week in grocery, one ultrafast delivery service shuts down and another is stronger than ever.
Sydney, Australia-based 10-minute grocery delivery service Milkrun is shutting down, the Australian Financial Review first reported on Tuesday (April 11). The founder and CEO of the organization, Danny Milham, informed the employees that the operation would be closed by the end of the week as they could not raise enough capital to keep the loss-making company going.
“Since we announced our structural changes in February, economic and capital market conditions have continued to deteriorate, and as the business continues to perform well, we strongly feel this is the right decision in the current environment,” Millham said in an email. According to the report to the employees.
The company launched in September 2021, and its delivery service operates in Sydney and Melbourne.
Milkrun isn’t the only on-demand delivery firm in those cities to buckle amid the challenges of the current economic climate. The Sydney Morning Herald reported on Friday (April 7) that DoorDash’s DashMart dark store express delivery arm has closed in the country nearly four months after launching in Australia.
The service and DoorDash, which operates in Sydney, Melbourne and Brisbane, planned to open dozens more dark stores this year, according to the report.
“We’re always evaluating where to invest in ways that support business and meet the needs of the communities we serve,” Rebecca Burroughs, general manager of DoorDash for Australia, New Zealand and Canada, told the outlet. “As we continue to invest in grocery stores and facilities in Australia, we have decided to focus our efforts on prioritizing choice for consumers and supporting our merchants and partners.”
Last month, in the US, 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 seizing the opportunity to consolidate. In December, it was first reported that Turkey-based e-commerce firm Getir was acquiring Berlin-based ultrafast startup Gorillas with the help of 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 Turankan Salur said, according to the report. “Today’s announcement exemplifies how leveraging the synergy of both organizations will not only create the largest and most efficient store network for ultrafast grocery delivery, but also significantly increase the product range and quality of service for our customers.”
Grocery inflation finally eases in April, but consumers are not optimistic
In March, grocery prices finally fell slightly for the first time in a long inflationary period this year.
Household food (ie, groceries) prices fell 0.2% in March from February, according to the Consumer Price Index for All Urban Consumers (CPI-U) data released by the US Bureau of Labor Statistics (BLS) on Wednesday (April 12).
However, food prices have not increased over that time and even though there has been a slight decrease, consumers do not believe that grocery inflation is improving. Instead, they continue to expect grocery prices to climb for the foreseeable future.
PYMNTS’ study “Consumer Inflation Sentiment Report: The False Appeal of Deal-Chasing Consumers,” which surveyed more than 2,100 U.S. consumers, found that 70% expect grocery prices to rise over the next year. In contrast, only 21% expect prices to stay the same, and only 9% predict a decrease. Also, the average consumer does not expect inflation to return to normal until late 2024.