Walmart expands home grocery delivery service

Ivan Schwartz
March 15, 2018

Walmart threw the latest punch in the most recent round of block-and-counter between the giants, announcing today its plans to expand its online grocery delivery option to more than 40 percent of US households by the end of the year. The company uses crowdsourced delivery services, such as Uber, to deliver orders to customers. Consumers will be charged a $9.95 fee, and orders must be no less than $30. The expansion of grocery delivery in 2018 will continue to rely on "crowdsourced delivery services", says Walmart.

"Through technology, great stores and our awesome team of associates, we're working hard to serve you whenever and however you want", said VP of Walmart's USA digital operations, Tom Ward.

That's in contrast to a plan Walmart announced last summer, in which the retailer said its own store employees would start delivering groceries on their way home from work shifts. It also comes at a time of intense competition within the grocery space and follows Amazon's purchase of Whole Foods past year. But another review wasn't happy: "What's the point of using this service if I just have to go back to a grocery store to fix your mistakes?", they wrote.

Online revenue growth slowed at Walmart in the most recent quarter, causing some analysts to question its strategy to compete with Amazon. By the end of the year, it should be available to roughly 40 percent of the country's households. The move - announced via press release Wednesday morning - indicates the seriousness by which Walmart takes grocery delivery threats from the likes of Amazon, Instacart and Target.

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The program includes same-day delivery. That service, available at 1,200 stores, will expand to 1,000 more stores later this year. Target, meanwhile, agreed to acquire delivery startup Shipt past year to expand its capabilities. It scored 3.7 out of 5 on Google Play and 4 out of 5 on Apple's app store, with people complaining about long wait times for their orders to be ready for pick up, and inaccurate packages.

Walmart will hope its expanded delivery service inspires bigger, more frequent orders and brings in new customers.

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

Online purchases account for only a small fraction of overall grocery purchases, but that share of the market is growing.

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