Amazon and Walmart are reportedly considering purchasing FreshDirect, as the grocery delivery service’s largest investor, J.P. Morgan, seeks potential buyers.
According to the New York Post, the two retailers have examined the financial and performance data of FreshDirect, making it at least the third time that Amazon and Walmart have considered acquiring FreshDirect.
FreshDirect has suffered service glitches since it moved to New York City’s South Bronx from Long Island City in July of 2018. The move was expected to enable the company to add thousands of new products and accelerate its expansion into new geographies. However, since that time, the Post reports, FreshDirect has been losing customers due to late and incomplete deliveries caused by difficulties with a new technology platform for FreshDirect’s pick-and-packing functions, which didn’t work with the customer-facing software.
The situation became so dire that FreshDirect’s chief executive sent an apology e-mail to customers a year ago, conceding that the transition to The Bronx “has not been as smooth as we planned” and that the company was focused on earning back customers’ trust.
For Walmart, FreshDirect could be its ticket into Big Apple, where labor groups have long blocked it from opening a store, notes the Post.
Earlier this year, FreshDirect launched a same-day delivery service enabling its customers who place an order before 10 a.m. to receive it that evening. FreshDirect’s chief growth officer P.J. Oleksak told Progressive Grocer the move to the Bronx “enabled us to really change the game in how we service our customers. Not only even better quality and execution, but doing things like launching same-day [delivery] with FreshDirect.”
Progressive Grocer's full interview earlier this year with CEO David McInerney and chief growth officer P.J. Oleksakis is available here.