In Challenge To Amazon, Walmart Will Deliver Groceries In Over 100 Cities

Walmart

Walmart plans to expand its online grocery delivery service to a fleet of roughly 800 stores by the end of the year, as competition continues to ramp up in the digital grocery aisle. The decision will also create damaging competition to Kroger (NYSE: KR) and other companies which focus nearly exclusively on the grocery business.

Walmart has been beefing up its online grocery options, including buy online, pickup in store and a pilot for in-fridge deliveries.

After a successful test of using Uber drivers to make grocery deliveries in a handful of cities including Dallas, Walmart is intensifying the battle to gain share of online grocery spending by taking its service to 100 metro markets.

"We're moving fast", Tom Ward, Walmart's vice president of digital operations, said in an interview.

Target acquired Shipt, a grocery delivery service, for $550 million late previous year and is offering same-day delivery on groceries, essentials and other products in some cities with plans for more.


Walmart's grocery delivery business will be supported by a number of partners, including Uber, the company said on 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. Amazon recently added free two-hour Whole Foods delivery to six cities, including Atlanta, Dallas and Cincinnati for its Prime members who pay $99 a year.

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 acquired Shipt, an Instacart rival.

Ward disagreed that Walmart's move was related to Amazon, saying: "This is our response to honestly what our customers have been looking for".

New customers can get their first order delivered for free with the promotional code "FRESHCAR". Customers place their orders online at Walmart.com/grocery or on the existing Walmart Grocery App, and unlike other services, they find the same every day low prices on items that they do in stores. The company said no subscription is required.

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