Fresh food delivery company Aussie Farmers Direct has gone into voluntary administration and is ceasing all operations with immediate effect.
The abrupt closure looks set to leave 260 employees out of work and affect more than 100,000 customers, some with unfulfilled orders.
Aussie Farmers Direct has blamed the closure on tough competition from the big supermarkets and the cost of imported foods.
A message on the Aussie Farmers Direct website read: “We are sad to announce that Aussie Farmers Direct is closing its operations today. After 13 years of working with many of Australia’s great farmers and delivering their fresh produce to Australian families, it is hugely disappointing that is has come to this. We are simply no longer able to compete against the domination of the major two supermarkets and the influx of cheap imported produce.
“Unfortunately, we will be unable to deliver any future orders to our wonderful customers. No one will be charged for these orders. Any customer who was scheduled to have a delivery on the afternoon of Monday 5th March and has been charged for this order will have their order refunded shortly.”
Aussie Farmers Direct began delivering vegetables, fruits, meats, bread and dairy products in 2005. It was one of the country’s first grocery delivery services, with the aim of connecting its farmers to Aussie shoppers without the corporate pressure of the big grocery companies. But after more than a decade of fierce competition, Aussie Farmers Direct has lost its battle with Coles and Woolworths.
Its decision to go head-to-head with Coles and Woolworths by expanding into a full grocery offering of predominantly Australian-made pantry items and household goods in 2016 is thought to have put huge pressure on its finances.
Aussie Farmers Direct becomes the second grocery store casualty of 2018 after Wray Organic went into liquidation in February, closing all its stores across Queensland and New South Wales.
Why did Aussie Farmers Direct fail?
Aussie Farmers Direct originally offered something quite unique, and for a while, customers seemed to have been won over. In 2015, the company topped Canstar Blue’s customer satisfaction ratings for online grocery shopping websites, before slipping to just three stars out of five the following year. It most recently achieved four stars for overall satisfaction, with Coles coming out on top.
Based on the most recent ratings, customers were least impressed with its delivery reliability, freshness of food and customer service, scoring it three stars in each area. However, it was praised with regards to special deals and the value for money it offered.
Canstar Blue’s most recent survey of online grocery shoppers found that 22% of respondents do all of their grocery shopping online, while 60% always use the same website. Going forward, 42% said they expect to do all of their grocery shopping online. Convenience was the most common reason given for choosing to shop online rather than in-store, with delivery costs the greatest frustration.
The failure of Aussie Farmers Direct has increased the dominance of Woolworths and Coles in the online grocery shopping market. However, there are other options still available if you want to support smaller retailers, including Grocery Run, Grocery Shop and Kogan Pantry.