The expansion will open up the retailer to 100 metropolitan areas, reaching more than 40 percent of USA households.
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 mean to add new customers in the sector. It has already been working with Uber as it has piloted its efforts.
The service, available today in six markets, will grow to serve more than 100 metro areas across the country.
And Target, through its acquisition of grocery delivery startup Shipt previous year, is expanding same-day delivery of such items as groceries and electronics to almost every major market by the holiday shopping season.
Building off of the company's recent series of grocery updates-including a partnership with Instacart through its Sam's Club wing, the acquisition of Parcel, and the recent announcement of its Eden technology to help reduce food waste-Walmart is now becoming involved in ag tech, with an application for a series of six patents aimed at farm automation, according to The Spoon. The retailer did not specify which markets will offer the service as part of the latest expansion, but Tom Ward, vice president of digital operations, said Walmart will be aggressive with the rollout.
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Grocery pickup and delivery services are a big part of Walmart's plan to grow its e-commerce business as well after USA online sales decelerated to 23 percent in the fourth quarter. "We will leverage our footprint where it makes the most sense".
Walmart will use its personal shoppers to collect orders in stores and continue to work with ride-hailing services like Uber for deliveries, which will carry a $9.95 fee and require a minimum order of $30. The decision will also create damaging competition to Kroger (NYSE: KR) and other companies which focus nearly exclusively on the grocery business. For now, younger shoppers tend to buy more groceries online, but the large majority shop in stores, Cowen said.
In Walmart's case, the orders will be picked by in-store employees, who will receive three weeks of additional training.
"We're going to gain customers who might not have access to a brick-and-mortar store", he said. The service was being offered in Dallas, San Jose, Denver, Phoenix, Tampa and Orlando.