Ahold Delhaize USA announced on Wednesday, 12 February, it is closing the Midwest division of its Peapod online grocery channel.
The move will enable the retail conglomerate to focus on its East Coast market and allow each of its local brands to “be the leading omnichannel grocery retailer in each of their markets,” it said in a press release.
Peapod’s Midwest division accounts for USD 97 million (EUR 89 million) in revenue of the USD 1.1 billion (EUR 1 billion) total online U.S. revenue for Ahold Delhaize. Peapod delivers a wide array of meat, seafood, produce, meal kits, and other groceries.
“As we’ve previously shared, to continue our strong track record of sales growth and market share gains, we are accelerating our growth and expanding the leadership positions of our businesses in our East Coast markets,” Ahold Delhaize USA CEO Kevin Holt said. “This move will enable us to fully focus on markets where we have strong store density, leading market share, and a longstanding heritage of customer loyalty.”
Effective 18 February, service for Midwest customers placing online Peapod grocery delivery orders in Illinois, Wisconsin, and Indiana will be discontinued.
“As a result of this decision, the following facilities will close: a distribution center and food preparation facility in Lake Zurich, Illinois; distribution facilities in Chicago, Illinois, Milwaukee, Wisconsin, and Indianapolis, Indiana; and a pick-up point in Palatine, Illinois,” Ahold Delhaize said.
The decision to close the division was difficult, “given Peapod’s rich history in the Midwest,” Holt said. “We know changes such as these are never easy for consumers and communities. We appreciate the loyalty of associates and customers in the Midwest sales business over the past three decades.”
Around 500 associates in the greater Chicago, Indianapolis, and Milwaukee markets will be impacted by the closure. However, they will be eligible to apply for other roles within Ahold Delhaize USA companies and those eligible will be offered severance and transition support services.
Peapod Digital Labs in Chicago will remain open and focused on enabling Ahold Delhaize USA’s local brands to “deliver leading omnichannel experiences for their customers and will deploy a new proprietary e-commerce platform for the local brands of Ahold Delhaize USA,” the retailer said.
“Chicago will remain the headquarters for our Peapod Digital Labs team, and we will continue to draw from the valuable pool of digital and e-commerce talent in the market,” Peapod Digital Labs President and Chief e-Commerce Officer J.J. Fleeman said.
Peapod technology will continue to be used for e-commerce and omnichannel growth through Peapod Digital Labs. That includes order routing technology for same-day and next-day delivery, a back-end order selection application to support its U.S. brands’ nearly 700 click-and-collect locations, and new loyalty programs that have the ability to integrate in-store and online shopping.
Photo courtesy of EQRoy/Shutterstock
