Walmart announced that it will expand its online grocery delivery service to more than 40 percent of USA households by year-end, growing from its current availability in just six markets to over 100 metro areas during that time. That service uses personal shoppers to select items and then take them to shoppers' cars parked at the curb.
Amazon is now rolling out free two-hour delivery of Whole Foods groceries in six cities to Prime members who pay $99 a year. With all those new cities, the service will eventually reach 40 percent of U.S. households, the company said. The news is the latest salvo in Walmart's quickly escalating war with Amazon, which just last month announced Whole Foods grocery delivery was available via Prime Now. Whole Foods also now offers delivery through Instacart, which ships groceries for Kroger, Acme and Costco, too.Target late previous year bought online grocery delivery startup Shipt for $550 million, adding to the competition. Walmart plans to use about 800 stores to operate the service. No subscription is required. For now, younger shoppers tend to buy more groceries online, but the large majority shop in stores, Cowen said. The Germany-based grocer announced last summer it is working with Instacart to conduct delivery tests in Dallas, Los Angeles and Atlanta.
Both companies have also introduced services that allow delivery people to enter homes and leave packages inside.
Carol Spieckerman, a retail consultant and president of Spieckerman Retail, said the grocery delivery expansion should give Walmart an opportunity to "forge relationships with new customers", especially those who value convenience but don't want to navigate the retailer's stores.
Walmart customers can place their orders online at Walmart.com/grocery or on the existing Walmart Grocery App.
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Groceries are key to Walmart's success with about 56 percent of its US revenue coming from grocery sales.
It expects to make online order pickup of groceries available at about 2,200 stores before 2019.
The retailer employs more than 18,000 personal shoppers that power the program with thousands more being added this year.
Walmart's grocery delivery business will be supported by a number of partners, including Uber, the company said on Wednesday. It says it will continue to use ride-hailing services like Uber to deliver the goods to shoppers' homes as it expands the service. Despite the slowed growth, executives have reiterated their forecast for 40 percent growth during the fiscal year.