Early Tuesday morning, Walmart Inc. (NYSE: WMT) announced that beginning Friday, December 4, the company is expanding its Walmart+ membership program by removing the $35 minimum order requirement for free shipping. The membership program costs $98 annually, compared to the $119 annual Prime membership offered by Amazon.com Inc. (NASDAQ: AMZN).
In the announcement, Walmart’s chief customer officer, Janey Whiteside, noted that customers “want this benefit.” She added, “No other membership allows customers across the country to get everything from gingerbread cookies and eggnog to holiday decorations and toys delivered for free as soon as the same day.”
Walmart did maintain its $35 minimum order on groceries to qualify for free delivery under the membership program.
According to a survey by payment industry analytics firm Pymnts.com, Amazon’s share of U.S. online traffic on Black Friday was 75%, compared to 43% for Walmart. The survey also noted that Walmart attracted 61% of shoppers who visited brick-and-mortar stores on Black Friday, more than any other retailer. At the end of the second quarter of this year, Pymnts.com estimated Amazon’s share of all U.S. e-commerce sales at just over 44% of the market.
Walmart noted in its announcement of the free shipping program that “[p]rices on items will remain the same.” That’s likely a swipe at Costco, which maintains a minimum order requirement for free shipping while also raising prices on many items to cover the shipping costs. A basic Costco membership costs $60 annually. According to Pymnts.com, about 11% of Black Friday shoppers visited Costco’s website.
One other new benefit tacked onto Walmart+ was an expansion of the number of locations where members can use their fuel discounts. The list now includes some 2,000 Walmart locations, more than 500 Sam’s Club stores, and Murphy and Murphy Express gas stations.
Walmart shares closed at $152.59 on Tuesday and traded down 0.1% in Wednesday’s premarket at $152.38. The stock’s 52-week range is $102.00 to $153.66, a high posted on Tuesday. The consensus price target on the stock is $161.44, and the dividend yield is 1.42%.