With another indication that the urban-focused site is scaling back, the Jet subsidiary of Walmart is concluding its fresh-food delivery business only a year after bringing the service to New York City. The retailer will shutter a Bronx warehouse it was using for order preparation and will also let go of some drivers, Bloomberg reported.
The move is reportedly the newest evidence of Jet’s falling importance. Walmart paid $3.3 billion to acquire the company in 2016 to reach urban millennials and gain Co-founder Marc Lore’s services. Although the firm’s online revenue has risen, much of its success has originated from grocery pickup, which is less expensive to operate than home delivery.
Jet’s fresh-food business has struggled since its rollout last fall, per unnamed sources. The firm has increased prices to offset the costs of filling orders in the largest city in the country. In recent months, products such as strawberries and avocados have been out of stock and key executives have left.
Walmart said in an emailed statement, according to the report, “We learned a lot by testing Jet fresh grocery delivery in New York City. We’ll continue to test bold concepts that can offer convenience to customers.”
News surfaced earlier this year that Walmart was overhauling Jet.com. The retailer would eliminate Simon Belsham’s role as Jet president as it worked to integrate Jet.com into its business. Jet team leaders would now report to Kieran Shanahan, who had been overseeing Walmart’s food, consumables and health and wellness divisions online. Belsham was to remain with the company until early August to help with the transition.
A Walmart spokesman told CNBC at the time that there were no layoffs planned and that Jet’s headquarters would stay in Hoboken, New Jersey. Walmart has also decreased its marketing efforts for Jet and is focusing on the growth of Walmart.com, per earlier reports.
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