Amid increasing competition from companies like Aldi, and the potential for more from Whole Foods/Amazon, Wal-Mart is expanding its online grocery delivery service to Dallas and Orlando.
Wal-Mart is finding success in online grocery sales, as those who shop online tend to spend more. This mirrors recent success Wal-Mart has been finding on its e-commerce properties.
At Bloomberg, Matthew Boyle explains Wal-Mart’s push for expanded grocery delivery:
The move is the latest step in Wal-Mart’s broader e-commerce push, which includes curbside grocery pickup in more than 900 locations and two-day free shipping on millions of items. It also comes just a week after German discounter Aldi unveiled grocery home delivery in Dallas and two other U.S. cities, and two days before Whole Foods Market Inc. shareholders are expected to approve the company’s $13.7 billion sale to Amazon.
Groceries account for more than half of Wal-Mart’s revenue, and the business saw its best sales in five years last quarter. Only 4.5 percent of shoppers made frequent online grocery purchases in 2016, up slightly from 4.2 percent four years earlier despite big investments from companies such as Wal-Mart and Amazon, according to TABS Analytics, a consumer products research firm.
But those who do order their groceries online spend more, Wal-Mart has found. In places like Denver, the service has attracted new customers who never shopped at the retailer before.
“We’re working hard to find a way to get you fresh, quality groceries all while keeping a little more time on your calendar,” Mike Turner, vice president of e-commerce operations, said in a blog post on the company’s website.
Read more here.
Jeremy Jones, CFA
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