Categories Analysis, Markets, Retail

How is Walmart doing in online grocery?

Walmart Inc. (NYSE: WMT) has been investing significantly in its ecommerce business, with particular focus on online grocery, which is fast gaining demand. The company has rolled out several initiatives and partnered with various smaller firms to make its grocery delivery as convenient as possible. Let’s take a look at these efforts and where the retail giant stands in the grocery ecommerce market.

At the beginning of this year, Walmart partnered with four delivery companies – Point Pickup, Skipcart, AxleHire and Roadie to expand its online grocery delivery option. At the time the company disclosed plans to add Walmart Grocery Delivery to an additional 800 stores this year on top of the existing 800.

In addition to the online ordering and pickup options, Walmart rolled out free two-day delivery and then last month, the company scaled it up a notch with next-day delivery, which costs even less for the retailer. The company plans to reach 75% of the US population by the end of this year through this initiative.

Walmart has now come up with a new idea called InHome Delivery. All these initiatives show the company’s diligent efforts to increase the convenience of the customer and thus drive sales.

At the recent shareholders meeting, Walmart’s CFO Brett Biggs stated that over the past three years, the company grew sales by about $32 billion. Sales in US ecommerce grew 40% last year, nearly doubling the size of this business over the past two years.

During its most recent quarter, Walmart posted sales growth of 37% in US ecommerce, reflecting strong growth in online grocery. The company posted comp sales growth of 3.4% in Walmart US, which was the fourth consecutive quarter above 3%. In Walmart US and Sam’s Club, grocery comp sales grew in the mid single-digit range with positive customer responses to the company’s pricing strategy and omnichannel offer.

Walmart currently has over 2,400 grocery pickup locations and nearly 1,000 grocery delivery locations. The retailer is on track to offer same-day grocery delivery from 1,600 stores this year and to offer grocery pickup from 3,100 stores by year-end.

According to a report by eMarketer, US grocery ecommerce is estimated to grow 18.2% to $19.89 billion in 2019, ranking as the fastest-growing product category online. While Amazon (NYSE: AMZN) is projected to hold the largest market share of US food and beverage ecommerce sales at 32.7%, other retailers like Walmart, Target (NYSE: TGT) and Kroger (NYSE: KR) are using their brick-and-mortar store footprints and online capabilities to drive sales growth and compete effectively against Amazon.

Although it may not be on par with Amazon at present, Walmart is doing well in online grocery and the company’s efforts continue to pay off and can be expected to drive significant growth going forward.

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