After testing out grocery delivery over the past two years in six USA markets, the largest retailer in the world said Wednesday it will bring the service to more than 100 metro areas in the U.S. over the coming months. It said it would expand that service to every Whole Foods by the end of the year, and it has already reached some neighborhoods in San Francisco and Atlanta.
Walmart will soon deliver groceries to almost half of U.S. shoppers.
"We're moving fast", Tom Ward, Walmart's vice president of digital operations, said in an interview. "We'll leverage our footprint where it makes the most sense to reach as many people with the services as we can".
Online grocery shopping is forecast to grow to $100 million, or $850 per household, by 2022, according to a study by the Food Marketing Institute and Nielsen. Customers can get their first order delivered for free with promo code FRESHCAR.
Amazon, which acquired Whole Foods for $13.7 billion past year, recently introduced two-hour grocery delivery from Whole Foods to its Prime members in four cities - Austin, Texas; Cincinnati; Dallas; and Virginia Beach, Va. - with further expansion expected.
And Sam's Club, the wholesale club arm of Walmart, announced a partnership with Instacart two weeks ago that offers same-day delivery on groceries and household essentials in three markets: Austin, Dallas-Fort Worth, and St. Louis.
Delivery is becoming less of an option, and more of market demand.
It also complements Walmart's rollout of curbside grocery pickup, now available in 1,200 stores and coming to an additional 1,000 this year.
Amazon is not the only threat Walmart faces.
The percent of the USA covered by the service is even more important than the city count.
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. That number will jump to over 2,200 by the end of 2018.
The retailing behemoth will expand its grocery home delivery services to more than 100 metro areas this year from the current six cities as the retailer steps up a fight against rival Amazon. 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".
Deliveries will be handled by Uber Technologies and other providers, and will carry a $9.95 service fee - with a $30 minimum purchase. Despite the slowed growth, executives have reiterated their forecast for 40 percent growth during the fiscal year.