Game on. Walmart Inc. (NYSE: WMT) will deliver groceries in 100 cites as a challenge to Amazon.com Inc. (NASDAQ: AMZN) and its Whole Foods operation. The decision will also create damaging competition to Kroger Co. (NYSE: KR) and other companies that focus almost exclusively on the grocery business. Walmart’s size and store distribution give it some advantages.
In its announcement, the world’s largest retailer said:
Walmart today announced plans to expand its popular Online Grocery Delivery option to more than 40 percent of U.S. households by the end of the year. The service, available today in six markets, will grow to serve more than 100 metro areas across the country.
Walmart Grocery Delivery brings customers the convenience of shopping when and where they want for quality, fresh produce, meat, seafood and bakery items, along with pantry staples, consumables and seasonal general merchandise. Customers place their orders online at Walmart.com/grocery or on the existing Walmart Grocery App, and unlike other services, they find the same every day low prices on items that they do in stores.
The percentage of the United States covered by the service is even more important than the city count. The fact that people can use an app is another step in Walmart’s push into e-commerce.
While Amazon has a grocery delivery service of its own, it has started to use Whole Foods and its Prime shopping and streaming media service as a means to add new customers in the sector. Early last month, the e-commerce behemoth announced:
Prime customers can shop thousands of items across fresh and organic produce, bakery, dairy, meat and seafood, floral and everyday staples from Whole Foods Market available for free two-hour delivery. Select alcohol is also available for delivery to customers. Prime members receive two-hour delivery for free and ultra-fast delivery within one hour for $7.99 on orders of $35 or more.
The Whole Foods service began in certain geographic areas in Austin, Cincinnati, Dallas and Virginia Beach. Whole Foods has about 470 stores across the country.
Walmart’s grocery delivery service has the advantage of Walmart’s relationships with tens of millions of customers and its 3,500 supercenters, which are two things Amazon cannot match.