Grocery delivery service Peapod LLC, which anticipated big growth in Indianapolis as recently as 2014, has pulled the plug on the market without having achieved the local success it had hoped for.
Peapod’s parent, Massachusetts-based Ahold Delhaize USA, announced Tuesday that it is pulling out of its Midwest market effective Feb. 18, closing distribution operations in Indianapolis; Illinois sites in Chicago, Lake Zurich and Palatine; and Milwaukee, Wisconsin.
The closings will affect about 500 employees, including the 15 people who work at the Indianapolis site, said company spokeswoman Christy Phillips-Brown.
Peapod, which is based in Chicago, was established in 1989 and entered the Indianapolis market in 2011.
In 2014, the company—which then had 13 local employees—announced plans to invest $9.7 million to build a 50,000-square-foot local distribution center that it anticipated would employ up to 238 employees.
The Indianapolis distribution site is located at 9222 E. 33rd St., in the Hunter Creek business park on the city’s east side.
At the time, the Indiana Economic Development Corp. pledged $1.4 million in conditional tax credits for Peapod based on its job creation plans. The IEDC tax credits are performance-based, meaning a company can only claim the credits after making progress toward its hiring and investment goals.
According to IEDC records, Peapod claimed only $11,567 in tax credits before the contract ended in 2017. The contract was set to run through the end of 2023 but ended early at the company’s request, the IEDC said.
The IEDC also approved a $25,500 training grant for Peapod in 2014, but according to IEDC records the company never claimed any of that money by the time the contract ended in 2017.
Looking ahead, Peapod will focus its efforts on the East Coast. In that market, Peapod serves as the in-house delivery service for Stop & Shop grocery stores, which are also owned by Ahold Delhaize. Stop & Shop is based in Boston and operates 415 stores in Massachusetts, Connecticut, New Jersey, New York and Rhode Island.
Ahold Delhaize also owns several other retail grocery chains, including Food Lion, Giant Food and Hannaford—but none of those chains has a presence in the Midwest.
“We don’t have physical storefronts in the Midwest,” Philllips-Brown said. “In the Midwest, it was an online business only.”
In an earnings call Wednesday morning, Ahold Delhaize said that its U.S. online sales totaled $1.1 billion in 2019, but only $97 million of that came from its Midwest market.