Dive Brief:
- Online grocer Misfits Market will close three facilities and lay off 649 employees on April 8 as it shifts its distribution operations to smaller fulfillment centers, according to recent Worker Adjustment and Retraining Notification (WARN) Act notices.
- The company sought to trim costs and streamline operations following its acquisition of fellow online grocer Imperfect Foods on Oct. 31, spokesperson Ken Shuman said in a statement to sister site Supply Chain Dive. The closures mark "a major step in our integration efforts," he added.
- "Our consolidation strategy is built around a distributed network of smaller fulfillment centers to support our first-party delivery by Imperfect Foods’ own driver network, reducing the need for large centralized facilities," Shuman said.
Misfits Market facilities closing on April 8
| Location | Number of affected employees |
|---|---|
| Delanco, New Jersey | 446 |
| Fort Worth, Texas | 121 |
| West Jordan, Utah | 82 |
Source: State WARN notices
Dive Insight:
Misfits Market's layoffs come as the company overhauls its distribution network to maximize the benefits of buying Imperfect Foods.
"Our first priority was leveraging the company’s combined assets to deliver an improved customer experience and reduce operational costs," Shuman said.
The deal, announced in September, included Imperfect Foods' fleet of 450-plus delivery vans and the know-how that comes with running an in-house fleet. Owning and maintaining a delivery fleet can be expensive, but it also provides businesses with more influence over the end-customer experience.
“[Owned delivery] is a very hard mechanism to go out and build and replicate,” Misfits Market CEO Abhi Ramesh told Grocery Dive last year. “They’ve built that institutional knowledge over the past few years and as a result of that, they control the last mile experience for the customer.”
Misfits Market, on the other hand, had been leaning on a network of third-party shipping providers to make deliveries. It still does so today, but it also uses Imperfect Foods' fleet to help it deliver across the lower 48 states, according to its website.
The largest layoff as a result of Misfits Market’s overhaul is at its Delanco, New Jersey, facility. It opened that facility in 2020 after outgrowing its original location in nearby Pennsauken, New Jersey, per a case study from the Metal Construction Association. The expansion allowed Misfits to double its order capacity and create opportunities to service Southern and Midwestern markets, the case study said.
Although the Delanco facility will close — along with the two sites in Texas and Utah — Misfits Market is planning on adding employees at its five other facilities in the coming months, Shuman said.
