MilkRun and three other food delivery services shut down in year due to cost of living crisis

A rise in the cost of living has led to the demise of Australia’s food delivery services, with four brands collapsing in the past 12 months.

Send, DashMart, Voly and most recently MilkRun have all been forced to cease trading, with the latter announcing the news on Tuesday.

Channel Nine reporter Chris Kohler revealed that the biggest problems these types of services face are an increase in the cost of rent, labor and groceries.

“How come delivery systems never seem to work? I mean it works for a while but then the companies seem to go out of business,” he said in a TikTok.

“So why is this happening?”

MilkRun allowed customers to choose a variety of groceries from selected mini-marts in Sydney and Melbourne, with deliveries arriving within 20 minutes.

“The problem is that rental costs have skyrocketed over the past 12 months,” Kohler continued.

“And the cost of employing 400 people also went up a lot, but if you jack up the cost of groceries yourself, people will probably just get up and go to the supermarket on their own.”

“So MilkRun was stuck.”

The delivery system reportedly lost an average of up to $13 per order.

MilkRun founder Dany Milham sent an email to his 400 employees on Tuesday blaming deteriorating market conditions for his company’s collapse, despite the company “performing well.”

He told his staff they wanted to ‘change the face of grocery delivery in Australia’.

On Friday, all riders will lock their bikes for the last time.

In January 2022, MilkRun raised $75 million in seed funding and was backed by Atlassian founders Mike Cannon-Brookes and Scott Farquhar, among others, making it one of Australia’s fastest-growing startups.

The company was thought to be worth in the hundreds of millions.

This week, Mr. Milham blamed it difficult economic and market conditions for the final decision to close the business.

“Since we announced our structural changes in February, economic and capital market conditions have continued to deteriorate, and while the company continued to perform well, we strongly feel this is the right decision in the current environment,” he wrote in the e-mail. to the staff.

Professor Gary Mortimer, a business and retail expert at the Queensland University of Technology, told Daily Mail Australia the MilkRun collapse was ‘not a shock’.

“It’s been on the wall for these hyper-grocery delivery people for a while,” he said.

“They grew considerably during the pandemic. It was opportunistic entrepreneurship at its best. We had populations in Sydney and Melbourne who were incarcerated and people who didn’t want to leave their homes.

“Obviously, as the pandemic came to an end, people were venturing back into supermarkets and we started to see these businesses start to fall.”

Mr Mortimer said it was also difficult to compete with supermarket giants such as Woolworths and Coles.

“When you have 3.5 percent unemployment, people don’t choose to cycle, they choose to look for a job elsewhere,” he added.

MilkRun closed in a position that allowed them to pay off their suppliers and staff.