Partnership involves Walmart sharing warehouse with Spud subsidiary
Retail giant Walmart is partnering with Vancouver-based online food-delivery company Sustainable Produce Urban Delivery (Spud) to offer online grocery delivery throughout Metro Vancouver, the companies announced February 21.
The partnership between the world’s largest bricks-and-mortar retailer and Spud’s Food-X Urban Delivery Inc. subsidiary will involve Walmart storing its food and being an anchor tenant in a 74,000-square-foot warehouse in Burnaby that Food-X plans to move into later this year.
Deliveries are expected to launch this summer.
“We are always looking for new ways to offer convenience and choice to our customers so they can shop when they want and how they want at Walmart’s unbeatable prices,” said Lee Tappenden, Walmart Canada CEO and President.
“Our strategic collaboration with Food-X allows us to serve customers in the heart of Vancouver in an environmentally friendly and sustainable way.”
Food-X is part of the larger Spud ecosystem that includes home delivery, small-footprint bricks-and-mortar retail, a commissary and food-preparation services and distribution. Spud will continue to operate its facility on East Hastings and its grocery delivery to customers.
Spud CEO Peter van Stolk told Business in Vancouver earlier this month that the Burnaby warehouse will have enough space for other retailers to store merchandise and have Food-X provide deliveries.
The business model will have Spud charge the retailers a fee for each delivery, but van Stolk said he expects that all deliveries will be free for the customer.
Spud already provides free delivery for its customers as long as they buy $35 worth of merchandise. Van Stolk estimated that his company currently makes between 370,000 and 400,000 deliveries per year and that the Walmart partnership and new warehouse’s orders will initially double that workload. The capacity for the new warehouse, he said, will be about 30,000 orders per week when it launches.
Other B.C. grocers provide delivery. Save-On-Foods, for example, offers a free initial home delivery and then charges $4.95 and up per order, according to its website.
Nova Scotia-based Sobeys announced in January that it is partnering with British online-supermarket venture Ocado to launch an online grocery store by 2020.
“Sobeys intends to play to win in Canadian online grocery shopping,” Sobeys CEO Michael Medline said in a news release at the time.
Sobeys’ partnership will involve Ocado taking two years to build a warehouse outside Toronto that will be equipped with the most modern e-commerce technology.