Skipcart is the latest in a series of delivery companies who have stopped working with Walmart. The company told Walmart on Jan. 31 that it was going to stop working with the retail giant, and it said its last day would be April 30.
That date has since been moved up to March, and Walmart has already been reassigning those stores previously covered by Skipcart to other providers.
Skipcart is based in Boerne, Texas, and it handles deliveries from 126 different stores through 32 states, and most of them are in smaller markets. The two companies began working together in 2018.
Both Deliv and Uber stopped working with Walmart in the past few years, saying “last mile” deliveries were increasingly difficult to make cost effective.
Skipcart CEO Ben Jones said the company was taking care of about 50,000 Walmart deliveries every month, but that it was losing money “hand over fist.” Skipcart would rather focus on delivering for restaurants, he said, which are easier to complete and make more money.
“The grocery model does not work,” Jones said. “It doesn’t work today, and it’s not going to work six months from now. We’re all losing money.”
Walmart leads the market for the online grocery business, but Amazon is nipping at its heels. The sector makes up 56 percent of its sales in the U.S., and it has helped to fuel 22 quarters of sales growth.
However, Amazon offers two-hour grocery delivery for Prime customers, and it doesn’t cost anything. It’s in over 2,000 cities, and it’s been growing at an impressive rate, with orders doubling in Q4 of last year.
Walmart also offers free pickup at many of its stores.