Walmart Inc. will expand its subscription grocery delivery option to 1,400 stores in 200 metro areas over the next few months, the retailer said Thursday. Called Delivery Unlimited, the service costs $98 a year or $12.95 per month.
Membership includes a free 15-day trial. And shoppers can still opt for same-day delivery of grocery orders of $30 or more for $9.95 per delivery, without a subscription.
The Bentonville retailer said in June that it was testing the subscription service in Houston, Miami, Tampa, Fla., and Salt Lake City. In a news release Thursday, Walmart said the decision to expand it was based on customers' positive response to the pilot program. Delivery Unlimited will be available in more than 1,600 stores and reach more than half of the U.S. by year's end, the company said.
The subscription option builds on Walmart's grocery delivery service, which lets customers buy fresh foods, pantry staples, household goods and select general merchandise on the retailer's website or app. Shoppers appreciate the convenience of grocery delivery, said Janie Whiteside, Walmart's chief customer officer. With Delivery Unlimited, she said, "we're providing incredible value to our customers and leveraging our unique assets to save them both time and money."
Tom Ward, senior vice president of digital operations for Walmart U.S., said the retailer has "been investing in our online grocery business by quickly expanding our grocery pickup and delivery services," and subscription delivery is the next step in that process.
Walmart said it employs more than 45,000 "personal shoppers" for these services. They go through a three-week training program that includes how to select the best produce and cuts of meat for online grocery customers.
When Walmart announced the pilot program in June, it drew comparisons to Amazon.com's subscription grocery delivery services. Amazon Prime Now is included in the cost of an Amazon Prime membership, at $119 a year. Along with other Amazon Prime benefits such as free two-day shipping and access to streaming content, Amazon Prime Now offers members free delivery of groceries from Amazon-owned Whole Foods Market for orders of $35 or more. It's available in nearly 90 U.S. areas.
Amazon's other subscription grocery option, Amazon Fresh, is available to Prime members for another $14.99 a month. It also offers free grocery delivery on orders of $35 or more, but is available only in 14 large metro areas. Amazon Fresh delivers groceries from Amazon fulfillment centers, though some products may have a Whole Foods label, according to Consumer Reports.
Target Corp.-owned grocery deliverer Shipt offers shoppers a $99-a-year subscription. Shipt delivers groceries from a number of partner stores and supermarket chains, including H-E-B, Meijer, Costco and CVS Pharmacy. Instacart also has a $99 annual grocery delivery subscription.
Keith Anderson with e-commerce analytics firm Profitero said Walmart's subscription service is a good move for the company, and possibly for some shoppers. From Walmart's perspective, he said, "it's an upfront fee that Walmart gets now that offsets some of the annualized costs of running the online grocery service, and gives them a margin of predictability."
But it's harder to gauge whether consumers stand to benefit, Anderson said. It may make sense for some households, he said, especially the more affluent, if they order frequently.
Also this fall, Walmart is testing in-home grocery delivery, directly to refrigerators, in Kansas City, Mo.; Vero Beach, Fla.; and Pittsburgh. The retailer has said that service will expand to about 70% of the U.S. over the next year.
Business on 09/13/2019