Walmart to expand grocery delivery services
Walmart (WMT) announced that it’s expanding its online grocery delivery pilot program through Uber in two new markets, Dallas and Orlando. The company began testing the home delivery of online grocery orders through Uber last year and is focusing on several other delivery options through its associates and with its own trucks and drivers. These methods are getting an overwhelming response and are designed to lower the last mile shipping costs.
The company stated in a blog post that once the customer places an online order, the Uber delivery partner will pick up the order from its store and deliver it to the customer.
Why online delivery is important
It’s imperative for Walmart to ramp up its online delivery service to drive sales, particularly at a time when consumers shift toward online shopping and the competition is heating up. Convenient, fast delivery of fresh foods remains the key differentiator in winning customers as Amazon (AMZN) gains ground with its AmazonFresh service.
Alongside Amazon, Costco (COST) recently announced that it has partnered with Shipt to expand its grocery delivery services. The company is already providing home delivery of grocery items in some locations through Instacart. Kroger (KR) and Whole Foods (WFM) also partnered with Instacart for online grocery delivery.
The graph above shows that Walmart’s digital sales in the US (SPY) are growing at a rapid rate with 60% growth in fiscal 2Q18 and 63% in fiscal 1Q18. The company has taken steps to fortify its position against competitors to hold and grow its market leadership in the grocery business.