Walmart's online same-day grocery ready for prime

Lloyd Doyle
March 14, 2018

Walmart Inc. plans to make its grocery-delivery service available to about 40 percent of USA households by the end of the year, expanding a program that has become part of its strategy to compete for grocery sales with, Target Corp. and others.

The service, which offers same-day delivery in as little as three hours, will be expanded from six metro areas to more than 100, ultimately reaching more than 40% of USA households by the end of the year.

Shoppers pay a flat fee of $9.95 but are required to spend at least $30 per order.

While Amazon has a grocery delivery service of its own, it has started to use Whole Foods, and its Prime shopping and streaming media service as a mean to add new customers in the sector. "We will be pretty aggressive with it".

Walmart is expanding its grocery delivery service across the USA this year, the company announced Wednesday. Walmart may also be able to use the new service as a way to give its online sales a shot in the arm, after a holiday quarter that disappointed Wall Street due to slowing online sales growth. Inventory snafus hurt sales, and investors have fretted over the impact that its e-commerce initiatives will have on profitability.

The move into home delivery looks like Walmart is battling with Amazon's Prime Now service that provides free two-hour delivery.

Target and Kroger have also been expanding their grocery delivery services. Target acquired Shipt, an Instacart rival. In-store employees will place orders to Walmart after getting three weeks of additional training. Orders placed by 1 p.m. will be delivered the same day. Whole Foods also now offers delivery through Instacart, which ships groceries for Kroger, Acme and Costco, too.Target late past year bought online grocery delivery startup Shipt for $550 million, adding to the competition.

Amazon, which acquired Whole Foods for $13.7 billion a year ago, recently introduced two-hour grocery delivery from Whole Foods to its Prime members in four cities - Austin, Texas; Cincinnati; Dallas; and Virginia Beach, Va. - with further expansion expected.

Online sales comprise just a fraction of the $800 billion USA grocery market - a smaller share than in countries like the United Kingdom or South Korea - but consumer acceptance is growing.

"We're going to gain customers who might not have access to a brick-and-mortar store", he said.

"It seems, at long last, groceries are making the transition to the digital age", he said.

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