Woolworths buys failed fast delivery start-up Milkrun, plans to ...

“Milkrun pioneered rapid grocery delivery in Australia, and I’m pleased to see the brand continue in Woolworths’ hands,” Mr Milham said in an emailed statement.

Milkrun developed a strong customer base in its inner-city target market by creating a network of warehouses dubbed dark stores, which stocked grocery products and enable delivery riders on e-bikes to get orders to customers in 20 minutes or less.

It was an eye-wateringly expensive business model, which followed the Uber playbook of spending dramatically to buy up market share, in the anticipation of profits at some point in the future.

But the incumbent supermarket chains were clearly spooked by the popularity of the new service amid the pandemic-era home delivery boom. Woolworths, Coles and Uber each launched their own faster to services to compete.

Speculation about a deal for Milkrun’s assets came after the start-up blew the dust off its Instagram account on Wednesday evening, to tease its 26,100 followers about a potential return.

Woolworths CEO Brad Banducci. Natalie Boog

A short video showed an arcade game branded with Milkrun’s logo restarting.

Metro60 rebrand

In a statement, Woolworths chief executive Brad Banducci said the Metro60 brand would be renamed Milkrun.

The current functionality of the Woolworths app will remain the same, and the deal provides access to Milkrun’s name, social media accounts and existing customer relationships.

“We’ve long admired Milkrun’s innovative brand, dedication to customers and ambition to shake up the grocery delivery model,” Mr Banducci said. “We are thrilled that the Milkrun story will continue to live on and thrive with Metro60 relaunching as Milkrun, now powered by Metro.

“Orders will be fulfilled from our network of Metro stores which will give customers the choice of over 10,000 product lines including hot roast chickens, fresh sushi and much more.”

While the Milkrun service will no longer be the same as the one that threatened to turn the supermarket sector on its head, the Woolies deal will take the brand nationwide.

It will be available from stores in more than 500 suburbs across Sydney, Melbourne, Brisbane, Canberra and the Gold Coast.

Woolworths will charge a flat $5 delivery fee, but a customer’s first three orders will be free. Everyday Rewards members will also accrue benefits with every Milkrun purchase.

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