Walmart to Expand Online Grocery Delivery Coast to Coast

Wednesday, 14 Mar, 2018

Instacart serves Walmart, Amazon, Costco and more.

The service is now available in six markets.

Walmart Inc. has also been testing a service using its US store workers to drop off general merchandise like toys and bedding to customers' homes after they finish work.

Walmart will soon deliver groceries to almost half of United States shoppers.

"It's going to happen pretty quickly throughout the year", Ward said, adding that the ultimate plan will be to reach as many households as possible.

About 90 percent of Americans live within 10 miles of a Walmart, Ward said.

While it's still a sliver of the total grocery basket today, Walmart, Amazon and traditional grocers are seeing increased demand for the convenience of online grocery shopping.

Walmart's online business had been a bright spot for the chain, but it stumbled during the holiday season.

Amazon, which acquired Whole Foods for $13.7 billion past year, 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. Target announced earlier this year that it plans to offer same-day delivery of groceries from half of its 1,800 stores using Shipt, a delivery startup it recently acquired.

The retailer also offers an Online Grocery Pickup service that allows customers to order their groceries online and pick them up in stores without ever getting out of their cars.

Ward disagreed that Walmart's move was related to Amazon, saying: "This is our response to honestly what our customers have been looking for". Cowen researchers saying a year ago that food and beverage sales online account for just 4 percent of total sales in the category, and online accounted for only 9 percent of sales for consumables like toothpaste and household goods.

Target and Kroger have also been expanding their grocery delivery services. For now, younger shoppers tend to buy more groceries online, but the large majority shop in stores, Cowen said. Deliveries will be handled by Uber Technologies Inc. and other providers, and will carry a $9.95 service fee - with a $30 minimum purchase. The company said no subscription is required. Prime members receive two-hour delivery for free and ultra-fast delivery within one hour for $7.99 on orders of $35 or more.

"Walmart must expand its delivery capabilities if it is to remain a contender against Amazon and lead the pack against all the rest", Spieckerman said.