Retail

Walmart's Jet.com will no longer deliver fresh groceries

Key Points
  • Walmart's Jet.com arm will no longer deliver fresh groceries in New York.
  • Instead, it will focus on dry goods and general merchandise.
  • Walmart bought Jet.com for $3.3 billion in 2016.
An employee assembles customer orders at the Jet.com Inc. fulfillment center
Daniel Acker | Bloomberg | Getty Images

Walmart's Jet.com arm will no longer deliver fresh groceries, roughly one year after it started offering this option in New York, the retailer confirmed to CNBC.

It will shutter a fulfillment center that it was using to make those deliveries, in the Bronx, New York. Instead, it will focus Jet.com on selling dry goods and other general merchandise. Fresh food had been the smallest part of Jet.com's business, according to a person familiar with the site's transactions.

Bloomberg first reported on the changes to Jet.com Friday morning.

"We learned a lot by testing Jet fresh grocery delivery in New York City, and we recognized the important role our stores play in providing an efficient way to offer groceries to customers through pickup and delivery," a Walmart spokesperson told CNBC in an emailed statement.

"We will focus our grocery pickup and delivery in markets where we have this incredible opportunity," the person said. "Jet will continue to offer millions of dry grocery and general merchandise items to customers in major metros like New York City. And, we'll continue to test bold concepts that can offer convenience to customers."

Earlier in the week, Walmart's earnings showed just how strong its grocery business has been and continues to be. While Walmart doesn't deliver fresh food to Manhattan, the retailer's massive grocery business has made it less crucial for Jet.com to do the same.

Walmart bought Jet.com for $3.3 billion in 2016, in a bid to acquire talent and juice its own digital operations.

Walmart earlier this year started folding Jet.com staff into its organization.

"We don't have the same need for a dedicated leader," at Jet anymore, said Marc Lore, the co-founder of Jet.com who now serves as the head of Walmart's e-commerce business in the U.S.

Walmart shares were down less than 1% on Friday. The stock has rallied more than 28% this year. Walmart has a market cap of about $340.3 billion.

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