Published: Wed, March 14, 2018
Business | By Tara Barton

Walmart's online same-day grocery ready for prime time

Walmart's online same-day grocery ready for prime time

Walmart is expanding grocery delivery this year to more than 800 stores that will reach 40% of United States households.

After testing out grocery delivery over the past two years in six USA markets, the largest retailer in the world said Wednesday it will bring the service to more than 100 metro areas in the United States over the coming months.

Uber Technologies Inc. and other providers will handle the home-delivery service and a shopper will pay a flat service fee of $9.95, with a $30 minimum purchase.

Walmart will soon deliver groceries to almost half of United States shoppers. With all those new cities, the service will eventually reach 40 percent of U.S. households, the company said. No subscription is required. "We'll leverage our footprint where it makes the most sense to reach as many people with the services as we can".

Online grocery shopping is forecast to grow to $100 million, or $850 per household, by 2022, according to a study by the Food Marketing Institute and Nielsen. There has been plenty of activity from retailers like Walmart and others in the grocery delivery space to support it.

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And Target, through its acquisition of grocery delivery startup Shipt a year ago, is expanding same-day delivery of such items as groceries and electronics to almost every major market by the holiday shopping season.

Game On. Walmart (NYSE: WMT) will deliver groceries in 100 cites as a challenge to Amazon (NASDAQ: AMZN) and its Whole Foods operation.

Even discount chain Aldi is exploring grocery delivery options. Walmart Grocery Delivery will offer fresh produce, meat, and seafood, as well as bakery items, along with pantry staples, consumables and seasonal general merchandise. Walmart said more delivery companies will be announced later.

Walmart is building on its online grocery pickup program that uses personal shoppers to pick items and then take them to shoppers' cars parked at the curb.

The company has its pickup program available at 1,200 locations across the US and plans to extend it to about 2,200 by the end of the year, according to Ward. The retailer employs more than 18,000 personal shoppers that power this program with thousands more being added this year. The decision will also create damaging competition to Kroger (NYSE: KR) and other companies which focus nearly exclusively on the grocery business. He did not specify which companies will be involved in the expansion and said Walmart will "continue to understand how that is going to look over the next 12 months". "We're serving our customers in ways that no one else can".

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