Walmart to expand grocery delivery business to 800 stores by year's end

Walmart  Google Play

Walmart Google Play

Walmart is making a major push into online grocery delivery.

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.

The service, now in six cities, will roll out to more than 40 percent of US households by the end of the year, the company said on Wednesday. Ward said the home-delivery service has brought in new customers in the six cities where it's now offered, which include Dallas and San Jose, California.

Uber will continue to be one of the delivery providers, but Ward indicated Walmart will work with other companies as well.

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

Game On. Walmart (NYSE: WMT) will deliver groceries in 100 cites as a challenge to Amazon (NASDAQ: AMZN) and its Whole Foods operation. The online retailer has already started offering free, two-hour deliveries of Whole Foods groceries in a handful of markets to its Prime customers. Target Corp., meanwhile, agreed to acquire delivery startup Shipt previous year to expand its capabilities. 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.

That means both Amazon and Walmart have a lot of potential business they could move online in future years - if consumer behaviors eventually change.

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

For packing the items together in stores, Walmart will use its collection of more than 18,000 "personal shoppers". No subscription is required. Customers place their orders online at 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. 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 said more delivery companies will be announced later.

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