Another Delivery Partner Abandons Walmart: A Cautionary Tale of Outsourced Grocery Delivery

Last week, grocery delivery company Skipcart told Walmart (NYSE: WMT) it wouldn't be able to continue ferrying Walmart's groceries to its customers at 126 stores in 32 states.

The news wasn't that remarkable, save for two details. One, Skipcart had been partnered with Walmart for less than a year before it backed out of the relationship, and two, Skipcart is the fourth company to stop delivering groceries for the world's biggest retailer.

On the surface, it's easy to assume Walmart is the stumbling block. Rival Amazon.com (NASDAQ: AMZN) delivers groceries, and, with the help of its shopping and home delivery company Shipt, Target (NYSE: TGT) does as well. Skipcart's decision, however, is more of an indictment of the whole idea of same-day delivery of perishables than an indictment of Walmart's logistics headaches. Investors counting on home deliveries as a differentiating force when selecting a stock may want to rethink how long grocers can continue subsidizing delivery without a major margin improvement taking shape somewhere else.

Source Fool.com