Walmart to expand online grocery delivery to 100 metro areas

Walmart to expand online grocery delivery to 100 metro areas”

The largest USA retailer is leveraging its stores to roll out online grocery deliveries from 800 Walmart stores by the end of the year.

"We're saving customers time by leveraging new technology, and connecting all the parts of our business into a single seamless shopping experience: great stores, easy pickup, fast delivery, and apps and websites that are simple to use", said Greg Foran, president and CEO, Walmart U.S.

Walmart's online business had been a bright spot for the chain, but it stumbled during the holiday season. The delivery service has been tested in Dallas-Fort Worth since August with Walmart employees filling the orders and Uber drivers making the deliveries. The retailer employs more than 18,000 personal shoppers that power this program with thousands more being added this year. The expansion will cover 40 percent of USA households, said Tom Ward, vice president of digital operations at Walmart.

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. Inventory snafus hurt sales, and investors have fretted over the impact that its e-commerce initiatives will have on profitability.

Walmart is going all-in on grocery delivery one month after Amazon announced it would start offering members of its Prime service free two-hour delivery from Whole Foods, which Amazon acquired past year in a $13.7 billion deal. That service has supplanted its Amazon Fresh program, which launched a decade ago but has been scaled back. Whole Foods also now offers delivery through Instacart, which ships groceries for Kroger, Acme and Costco, too.Target late past year bought online grocery delivery startup Shipt for $550 million, adding to the competition.

Other big grocers, such as Kroger Co. and Costco Wholesale Corp. Target Corp., meanwhile, agreed to acquire delivery startup Shipt a year ago to expand its capabilities.

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

Meanwhile, Kroger said Monday that it's expanding its delivery services to 500 additional stores - from the almost 900 stores where it's now offered - through its partnership with Instacart. "We're serving our customers in ways that no one else can".

Online sales comprise just a fraction of the $800 billion US grocery market - a smaller share than in countries like the United Kingdom or South Korea - but consumer acceptance is growing. While only one in three shoppers now purchase groceries online for home delivery, about six in ten expect to use it more in the next five years, according to a survey of 1,100 people conducted by industry researcher Field Agent.

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