Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Grocery Wars

Walmart wants to make everybody a Delivery Person

Walmart (NYSE: WMT) wants to turn every cashier, stocker and assistant manager in its stores into a delivery person.

A new program would pay employees to drop packages off at customers’ homes or business after they leave work, The Washington Post reported. The delivery initiative is already being tested at Walmart stores in New Jersey and Arkansas, CEO Marc Lore told reporters.

The idea behind the program is to cut delivery costs while increasing the availability of same day delivery. That would better position Walmart to undercut the prices of its arch-rival Amazon (NASDAQ: AMZN) and offer more customer service.

One way to do that would be to pull goods directly off store shelves and bypass potentially expensive delivery services like FedEx (NYSE: FDX) and UPS (NYSE: UPS). Another savings would come if Walmart can use its own fleet of trucks instead of FedEx or UPS to ship goods to stores for local delivery.

Will it Work?

What is unclear is whether the program will work and if employees would be willing to participate. The pay and potential mileage reimbursement employees will receive was not mentioned in The Post article.

A greater problem might be liability who would be responsible if a Walmart employee got into an accident while making a delivery? The natural target of the personal injury attorney will be the corporation with $486 billion in revenues not the $10 an hour cashier.

Other problems will be logistics and the potential for labor unrest if workers feel they are being coerced into making deliveries. That might lead to calls for unionization and strikes at the store.

News articles did not say if and Sam’s Club orders will be included in the delivery program. Nor did they say if items ordered through Walmart’s marketplace will be available for local delivery.

Expect to see other retailers like Costco Wholesale (NASDAQ: COST) and Kroger (NYSE: KR) follow Walmart’s lead and recruit employees as delivery people, if this experiment succeeds. If it fails the big winners will be Google Express, Uber, Lyft and Deliv to which retailers will have to turn to for same-day delivery services.