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Walmart Is Expanding Its Delivery Services

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Jan. 18 2019, Updated 8:06 a.m. ET

Walmart partners four new delivery companies

On January 17, Walmart (WMT) announced that it has teamed up with four new delivery companies—Skipcart, Point Pickup, Roadie, and AxleHire—to offer online grocery delivery in cities across four states. Walmart wants to strengthen its doorstep delivery services. The company plans to expand the services in the coming weeks.

Walmart is defending and growing its market share. The competition is heating up in the grocery business. Amazon (AMZN) and Target (TGT) are rapidly gaining ground with their expanded delivery options. The fast delivery and convenience associated with the grocery business are driving consumers towards e-commerce platforms.

Previously, Walmart partnered with DoorDash, Postmates, and Deliv to supplement its delivery service. Walmart’s grocery delivery services require a minimum order value of $30 and have a simple fee structure. The company boasts about delivering orders the same day.

Currently, Walmart offers grocery delivery services at more than 800 stores. The company plans to add another 800 locations this year. Walmart has expanded its popular online grocery pickup services to 2,100 stores. The company expects to expand the services to 3,100 stores this year.

Walmart’s expanded delivery services, omnichannel offerings, acquisitions, and price investments are expected to drive its traffic and e-commerce sales growth rate.

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Competition plays spoilsport

Walmart had an impressive e-commerce sales growth rate in the past three quarters due to the company’s continued investments in growth measures. However, the benefits haven’t been reflected in Walmart stock. Competitors have also ramped up their offerings. Target expanded its same-day delivery through Shipt to ~1,400 stores across 25 markets. Target has also grown its curbside pickup to 1,000 stores. Amazon is expanding its delivery through Whole Foods. Amazon is matching Walmart and Target’s online grocery pickup services.

More competition in the domestic market is expected to hurt these retailers’ margins, which are razor thin.

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