German retailer Kaufland has announced that it is putting an end to its grocery delivery service in Berlin after one year of operation.
In October, it was reported that the retailer was halting the expansion of its online service due to cost issues, however, the company now says that it is discontinuing its e-commerce venture completely by 23 December.
Kaufland launched online delivery in Berlin last year, and says that consumer demand has been high, but the service has not proved to be economically viable, according to management.
"With regard to profitability, price and market development, we see that a delivery service in the food sector can not be operated to cover costs," said Patrick Kaudewitz, CEO of Kaufland.
"Even on the Internet, customers should be able to rely on our price promise. Higher prices for food delivery are not an option for us."
The sister retailer of discount giant Lidl, both operated by the Schwarz Group, had originally planned to offer delivery services in Hamburg, Munich, Frankfurt and Düsseldorf.
German Market
Competition is high in the German grocery delivery market. AmazonFresh launched its online supermarket in Berlin in May, offering same-day delivery on thousands of products, before extending its service to Hamburg in July.
In response, Edeka announced that its online shopping platform Bringmeister would also offer a same-day delivery service in the capital city.
Last week the retailer opened a new logistics centre near Munich, which will allow it to expand delivery operations to the city.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
