Walmart expands grocery delivery service in fight with Amazon

Chelsea West
March 15, 2018

Walmart will spread its Online Grocery Delivery service to more than 100 cities across the U.S. by the end of the year, the retailer has announced, as it responds to the challenge of app-based delivery upstarts.

Canada's biggest warehouse retailer, whose grocery market share has increased substantially over the last decade along with Walmart's, introduced online grocery delivery of non-perishables to us customers last October. "We know organics are important to our Online Grocery customers", said a spokesperson in an email.

Though many companies, Amazon in particular, are now working to shorten the supply chain with grocery delivery, with this move Walmart gains greater control over its supply chain on the production side. "For packing the items together in stores, Walmart will use its collection of more than 18,000 'personal shoppers'". The retailer experimented with other last-mile delivery options since then, including a pilot that has store associates delivering online orders on their way home from work.

But as a new research brief from CB Insights points out, all these endeavors could benefit from Walmart's getting involved in the other end of its grocery store supply chain-that is, farming the crops that eventually wind up on its store shelves.

Amazon's purchase of Whole Foods Market a year ago has raised the stakes in the highly competitive grocery delivery wars. Tom Ward, vice-president of digital operations for Walmart US, touted Walmart's brick-and-mortar infrastructure in today's press release, noting that it gives the company a "unique opportunity" in delivery.

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Last week, Costco chief executive Richard Galanti told investors on the retailer's second-quarter conference call that its foray into online grocery sales was "positive year-to-date and growing".

And in addition to the 1,200 Walmart stores that now offer online grocery curbside pickup, the retailer is adding 1,000 more locations to the service in 2018.

In the expanded rollout of delivery, which will be available as a same-day or scheduled service, Walmart said it would employ its own in-store pickers to compile its shoppers' orders.

Amazon seeks to compete for this business through its Amazon Fresh and Prime Now services, and is expanding its delivery from Whole Foods stores, but it can not match the physical reach of Walmart's delivery capacity, he said. Walmart's Online Grocery Delivery carries a simple $9.95 fee and a $30 minimum order - no subscription, no price markups.

The Amazon/Whole Foods delivery is available to Prime members-which costs $99 annually-in six cities now. Walmart now offers online delivery in six markets.

Other reports by TheSundaySentinel

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