Walmart's online same-day grocery ready for prime

Walmart

Though many companies, Amazon in particular, are now working to shorten the supply chain with grocery delivery, with this move Walmart gains greater control over its supply chain on the production side.

The move into home delivery is part of Walmart's broader push to get more of its in-store shoppers to start buying online as well, where they typically spend twice as much. No subscription is required.

Walmart plans to use its team of personal shoppers to pull together orders in stores and will team up with crowdsourced delivery services including Uber to send groceries. As it takes the service to other cities, it may use other crowd-sourced delivery methods in addition to Uber. Those stores will be the first to introduce the program, Tom Ward, the vice president of Walmart's digital operations in the US, said on a call with members of the media. It will add curbside pickup to 1,000 more locations by the end of the year, Ward said.

A recent study conducted by the Food Marketing Institute and Nielsen concluded that 70 percent of consumers will be grocery shopping online in as few as five to seven years. 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. The decision will also create damaging competition to Kroger (NYSE: KR) and other companies which focus nearly exclusively on the grocery business.

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For shoppers who are new to the program when it rolls out later this year, Walmart is offering $10 off a first order of $50 or more, and free delivery if a basket also meets that threshold.

"Walmart must expand its delivery capabilities if it is to remain a contender against Amazon and lead the pack against all the rest", Spieckerman said. He did not specify which companies will be involved in the expansion and said Walmart will "continue to understand how that is going to look over the next 12 months".

It expects to make online order pickup of groceries available at about 2,200 stores before 2019. "We're serving our customers in ways that no one else can".

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