Walmart announced that it will expand its online grocery delivery service to more than 40 percent of US households by year-end, growing from its current availability in just six markets to over 100 metro areas during that time.
Groceries can be delivered to customers as soon as the same day.
Rival delivery service Instacart, which is backed in part by Whole Foods and reportedly holds an exclusive delivery deal with the grocery chain, recently announced deals with Albertsons and QFC in recent months.
For packing items in the stores, Walmart will use over 18,000 personal shoppers. Walmart Grocery makes deliveries in as little as three hours from the time you put in the order.
Walmart's dive into online grocery delivery continues its push to become a bigger player in e-commerce and take on Amazon.
Right now the delivery option is only available in six markets, with plans to expand to 100 by the end of 2018. For those who want service within the hour, customers can pay an additional fee of $7.99.More news: Marcus Smart out indefinitely with torn ligament in thumb
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Online revenue growth slowed at Walmart in the most recent quarter, causing some analysts to question its strategy to compete with Amazon. Following the expansion, the service will cover 40 percent of USA households.
Walmart will soon deliver groceries to almost half of United States shoppers.
Walmart's grocery delivery isn't cheap - it will cost $9.95 per order with a $30 minimum, unlike Amazon's subscription model that offers free grocery delivery to Prime members. That's a significant expansion from its current six markets, and will make the service available to more than 40% of United States households by the end of the year.
Since there are no local stores, grocery orders in NY will be fulfilled by Jet, the e-retailer Walmart bought in 2016 for $3 billion. Walmart also announced a plan earlier this month to bring meal kits to thousands of its stores. The decision will also create damaging competition to Kroger (NYSE: KR) and other companies which focus nearly exclusively on the grocery business.
Coupled together, this is where the retailer can shine, Sigman says, because online grocery still remains "largely an untapped market".