Woolworths buys Milkrun as the supermarket giant swoops in to save failed delivery start-up
- Woolworths bought Milkrun
- Delivery start-up collapsed almost two months ago
Grocery delivery start-up Milkrun has been saved by Woolworths almost two months after it was run out of business by larger competitors.
Milkrun founder Dany Milham confirmed on Thursday that Woolworths Group has officially acquired the brand and operating entity, The Australian Financial Review reported.
The website for Woolworths’ own Metro60 delivery service has now rebranded to ‘Milk Run powered by Metro’ in the distinctive blue and white colour scheme of the start-up.
Grocery delivery start-up Milkrun has been saved by Woolworths almost two months after it was run out of business by larger competitors
Milkrun founder Dany Milham confirmed on Thursday that Woolworths Group has officially acquired the brand and operating entity, The Australian Financial Review reports
Users will be able to purchase from a range of more than 10,000 grocery items and thousands of weekly specials on the app every day.
There will be no service fee, a flat $5 delivery fee and an average delivery time of just 33 minutes, the website promises.
Speculation Milkrun could be revived began to swirl on Wednesday evening before Mr Milham confirmed on Thursday a deal had been struck.
‘Milkrun pioneered rapid grocery delivery in Australia, and I’m pleased to see the brand continue in Woolworths’ hands,’ he said.
The exact figure of the deal has not been disclosed but it is estimated to be worth $10million.
Milkrun announced in April it would close its doors and make all staff and riders redundant, becoming the latest in a long line of rapid grocery delivery firms to close.
Company founder Dany Milham sent an email to its 400 workers in which he blamed worsening market conditions for his company’s collapse despite the business ‘performing well’.
But Professor Gary Mortimer, business and retail expert at the Queensland University of Technology, told Daily Mail Australia the company’s collapse was ‘not a shock’.
‘The writing was on the wall for these hyper-grocery delivery start-ups for some time,’ he said.
‘They grew significantly during the pandemic. It was opportunistic entrepreneurship at its very best. We had populations in Sydney and Melbourne locked down and people not wanting to venture out of the home.
The website for Woolworths’ own Metro60 delivery service has now rebranded to ‘Milk Run powered by Metro’ in the distinctive blue and white colour scheme of the start-up
‘Obviously as the pandemic came to a close, people ventured back into supermarkets and we started to see these businesses start to fall over.
‘First to go was Deliveroo, then there was Send, then Quicko and Voly. For Milkrun the writing was on the wall for sometime. It’s incredibly difficult to scale that business when you’re needing riders and bikes to deliver the groceries in some cases under 15 minutes – it’s just not sustainable.
‘When you’ve got 3.5 per cent unemployment – people aren’t choosing to ride bikes, they are choosing to get jobs elsewhere.’
Prof Mortimer said that small and agile start-ups like Milkrun and Voly had been able to exploit the demand for rapid deliveries in urban areas during lockdown because for Woolworths and Metro it was a case of being ‘tough to turn a big ship around’.
More to come
