Walmart Enters the Grocery Home-Delivery Space

Walmart is set to expand its same-day grocery delivery online service to over 40 percent of U.S. households by the end of 2018, according to a recent press release. The retail giant may be expanding the service to better compete against Amazon, which recently acquired grocery chain Whole Foods and which has its own grocery delivery service, AmazonFresh.

The expansion will bring Walmart’s grocery delivery services to 100 metropolitan areas and will provide shoppers with same-day delivery of fresh produce, meat, and seafood, along with non-perishable items. Tom Ward, Walmart’s vice president of digital operations, said “We will…reach as many households as we can. We will leverage our footprint where it makes the most sense.” A shopper will pay a flat delivery fee of $9.95 for the service, and they must order at least $30 worth of items. Orders can also be placed via a Walmart Grocery app. There is no subscription required, as is the case for Amazon Fresh and a handful of other, more costly options on the market.

This delivery service is an improvement over Walmart’s curbside grocery pickup, which is currently available at 1,200 stores. 18,000 personal shoppers have so far patronized that service, and the company plans to accelerate its rollout to 2,200 by the end of 2018.

According to Ward, under the new program online grocery orders will be handled in a Walmart store by company workers and then packaged off to a third-party delivery company that uses contract workers to bring orders to homes.

Ward also said that ridesharing company Uber will be one of the initial partners, expanding a pilot program started in 2016. Other delivery partners will be added later this year. According to The Wall Street Journal, Walmart currently offers grocery delivery in six cities through Uber and Deliv, a California-based delivery startup.

“We are gaining new customers who might not have had access to Walmart previously,” Ward said. According to CNBC, the service was initially being offered in Dallas, San Jose, Denver, Phoenix, Tampa, and Orlando. For shoppers who are new to the program when it rolls out later this year, Walmart is offering $10 off the first order of $50 or more, and free delivery if an order also meets that cost threshold.

Walmart is known for their low prices for staple goods, which may prove to be the retail chain’s key advantage in this space. Amazon is not Walmart’s only competitor in this market. The retailer also recently added meal kit delivery services, competing with companies like Blue Apron and HelloFresh. With the expansion of Walmart’s grocery service, consumers have yet another time-saving, convenience-enhancing option for buying groceries. Walmart’s entry into this area will increase consumers choice.

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