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 bring Grocery Delivery to 40% of Americans

Walmart (NYSE: WMT) just upped the ante in the grocery wars tremendously. The world’s largest retailer plans to offer grocery delivery to 40% of America’s population by the end of 2018.

The discounter will expand its grocery-delivery service to more than 100 metro areas from the current six, Tech Crunch reported. Details of the service are limited but it will apparently involve third-party delivery services like Uber, Lyft, and Deliv, and some in-house solutions.

To lure customers Walmart is offering delivery for just $30, and no subscription fee. Amazon requires a subscription and Kroger’s ClickList requires a $9.99 minimum for grocery pickup.

Walmart bought the last-mile delivery service Parcel that operates in New York City last year. It also owns the online discounter Jet which is experimenting with same-day delivery in New York City. Walmart joined Alphabet’s (NASDAQ: GOOG) Google Shopping Express Same-day delivery service last year.

Beyond that Walmart has been operating branded delivery vehicles in some markets; such as Denver, for years. Marc Lore, the president and CEO of Walmart eCommerce has talked about paying Walmart employees to deliver items on their home from work.

A press release said Uber will rely on crowdsourced delivery options such as Uber, Lyft, and Deliv. Other services such as Roadie and CarSmartt might be added to the program as it expands. Another option that Walmart might tab is GrubHub (NYSE: GRUB) which has had extensive experience with online delivery and a huge network of contractors around the country.

Walmart Wants to Bring Personal Shoppers to the Masses

Walmart’s plans will be based on personal shoppers who will fill orders people place online or through an app then relay it to employees in stores or fulfillment centers. Those employees will pull the order and ready them for shipping.

The company has established a three-week training program for personal shoppers and now employs 18,000 people in that capacity, Tech Crunch reported. Walmart is also developing an artificial-intelligence (AI) based personal shopping assistant for rich moms called Code Eight through its incubator Store No. 8. It goes without saying that once it is perfected Code Eight can simply be expanded to serve all income levels.

An advantage Walmart has is it that can leverage existing resources including local stores and employees to prepare the orders. Another is to simply add the service to the 1,200 stores that offer grocery pickup. Walmart offer same-day delivery by simply having Uber, Google Shopping Express, or Deliv drivers can pick up orders from such stores and take them to customers.

The company can up the game by having the same drivers drop off prescriptions, meal kits, precooked meals, and general merchandise in addition to groceries. A smart move for Walmart would be to offer its deli foods, meal kits, and groceries through GrubHub.

All-Out Grocery Delivery War Breaking Out

Walmart has definitely turned up the heat in the grocery wars. Amazon (NASDAQ: AMZN), Kroger (NYSE: KR), Target (NYSE: TGT), and the privately held Safeway-Albertsons will have to respond. Kroger recently sold its convenience store operations possibly to get cash to expand its delivery services nationwide. Target bought the delivery service Shipt for $550 million and Amazon has launched delivery of groceries from Whole Foods.

Likely responses to Walmart’s offensive might be Amazon’s acquisition of a traditional grocer like Safeway or Winn-Dixie, or Amazon or Target partnering with traditional grocers such as Publix. Kroger might respond by buying InstaCart and joining Google Shopping Express.

Amazon, Safeway, or Target might respond by offering Uber grocery delivery. Kroger is already experimenting with Uber grocery delivery and is offering InstatCart Delivery throughout the nation. That service is likely to be expanded nationwide, and opened up to include more crowdsourced solutions.

It looks like a brutal new chapter in the grocery deliver wars is about to erupt. The only winner apparent at this stage is likely to be the customer who will have many new grocery delivery options at a low price.