(Reuters) – Walmart Inc. and logistics company Deliv have pulled the plug on an important partnership for delivering groceries on the same day and kicked off the retailer's race against rival Amazon.com, Inc., for food To deliver customers home.
FILE PHOTO: The Walmart logo can be seen on November 20, 2018, in front of one of the stores in Chicago, Illinois. REUTERS / Kamil Krzaczynski / File Photo
The world's largest retailer began strengthening its partnerships with a third-party courier Companies reached consumers in 100 US cities last year after not using Uber and Lyft to deliver food and tried to use their own staff to deliver goods.
Deliv, one of Walmart's first partners with pilot programs in Miami and San Jose, had sent the retailer a 90-day notice period, and the two companies stopped working together at the end of January, two well-known people said  Walmart confirmed the previously unreported decision and said that he is still working with seven delivery companies, including DoorDash and Postmates, four of which were signed in January.
People familiar with the Walmart partnership with Deliv said Deliv drivers often had to wait 40 minutes or more to collect food orders when they arrived at the store. One reason, she said, is that Walmart gives customers priority over the delivery drivers during regular business hours.
The stores at Walmart "were a huge problem," said one of the individuals with direct knowledge of the matter, adding that the retailer could "not process online grocery orders fast enough".
Deliv declined to comment. Walmart spokeswoman Molly Blakeman told Reuters, the retailer, and Deliv decided to end the partnership. "Like any pilot, it's about learning. Ultimately, we came to the conclusion with Deliv that while their platform is a good delivery option, it was not the best solution for our program at the time.
Blakeman said that same day food delivery is currently available in 800 of its products, more than 5,000 US branches and warehouse clubs, and the retailer plans to open 800 more this year.
Deliv Offers Scheduled Same-Day Shipments via Gig Driver, a model that works well with faster order processing and better forecasting of demand and robust volumes. Walmart now works primarily with restaurant delivery companies who deliver an order as soon as it's generated, one source said.
Both sources said order volumes were low in many markets, and one source indicated that orders had to be sent over long distances, resulting in Deliv and Walmart losing money.
"When the partnership with Deliv was signed, it was hoped that demand would be stronger than it is now," said one source.
Deliv operates in 1,400 US cities and uses local Freelance Driver Networks to deliver packages to a number of retailers for a fee, from Home Depot Inc. to Kohl's Corp.
In October, $ 40 million was raised in a new round of financing by investors, including Google and United Parcel Service of Alphabet Inc. In December, 20 new US retailers, including Nike Inc and Nordstrom, were registered.
Deliv can process and deliver thousands of orders in an hour. Walmart in San Jose sometimes only generated one hundred jobs a week. There were problems with the processing of this volume by the shops, said one of the sources. Walmart is working to resolve the problems in the stores to handle orders faster, the source added.
Blakeman said there are no problems with the order volume in the market.
The sources told Reuters that Walmart completed a separate food delivery test starting in 2017, partnering with smart home security firm August Home and Deliv for keyless entry into buyers' homes to deliver food directly to the refrigerator deliver.
Reporting by Nandita Bose in Washington; Cut by Vanessa O'connell and Edward Tobin