Walmart Expands Home Grocery Delivery To 100 Cities

Walmart Expands Home Grocery Delivery To 100 Cities

Walmart Inc. plans to expand its grocery home-delivery service to more than 100 metro areas this year, a sign its food fight with Amazon.com Inc.is heating up.

Though many companies, Amazon in particular, are now working to shorten the supply chain with grocery delivery, with this move Walmart gains greater control over its supply chain on the production side. "We will be pretty aggressive with it".

Customers living in available locations can order deliveries online at Walmart.com/grocery or on the Walmart Grocery app.

So far, Walmart offers curbside grocery pickup at 1,200 stores and plans to accelerate the rollout to 2,200 by year-end. 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.

Prime customers can shop thousands of items across fresh and organic produce, bakery, dairy, meat and seafood, floral and everyday staples from Whole Foods Market available for free two-hour delivery. Both companies have also introduced services that allow delivery people to enter homes and leave packages inside. Target acquired Shipt, an Instacart rival. Ward said more workers are moving into that position on a weekly basis, as more Walmart stores are outfitted to fulfill orders via its website. The decision will also create damaging competition to Kroger (NYSE: KR) and other companies which focus nearly exclusively on the grocery business.

Tom Ward, vice president of Walmart's digital operations, says the retail giant is powering the expansion of its same-day delivery service using its online grocery pickup program.

"We're going to continue to look for ways to utilize our stores and our e-commerce teams together and our businesses together because we believe long-term that's where we win as a company, is getting those two things in sync", Chief Financial Officer Brett Biggs told investors during a presentation at the Raymond James Institutional Investors conference last week.

Online sales comprise just a fraction of the $800 billion USA grocery market - a smaller share than in countries like the United Kingdom or South Korea - but consumer acceptance is growing.

Walmart's new service could also be a response to Amazon's $13.2 billion purchase past year of Whole Foods.

That has US grocers racing to meet demand, Chris Medenwald, a marketing manager at Field Agent, said in a report.

For Walmart's new service, each delivery will cost customers $9.95 and orders must be a minimum of $30 each.

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