Walmart Might Test E-Grocery Delivery Service

The retailer hasn't committed yet, but is said to have plans to test grocery delivery in California.

April 05, 2011

SAN JOSE, Calif. -- Walmart will likely begin testing of an online delivery service of fresh groceries in California soon, Bloomberg reports. The service, which has yet to receive a final go-ahead, will take place in San Jose, Calif.

"Wal-Mart needs to get more serious about e-commerce, so that would be interesting," said Matt Nemer, a Wells Fargo analyst. "Grocery delivery works in urban markets, and they already do it in the U.K., so they have experience."

Recently, the retailer has shifted some of its focus to its online business. Walmart is also opening smaller format Express stores. In October, Bill Simon, head of U.S. operations for the retailer, said that it would be testing online grocery "in the coming year." Walmart already has grocery delivery in Japan, Mexico and the United Kingdom.

Walmart.com stocks more than 500,000 items, including some that are not available in stores. Online sales jumped as much as 70 percent in 2010 to reach around $6 billion, according to Nemer.

In 2010, Walmart.com started offering breakfast items, snacks, candy and beverages, selling the items in multipacks. The site also offered free, same-day pickup of online orders in stores, which will be available in all locations by June 2011.

Other grocers have tried online delivery services to both success and failure. Webvan and PublixDirect bombed in the online home-delivery service.

However, Peapod has found a niche in offering home delivery of groceries in eight East Coast states and Washington, D.C. Safeway has Web-based delivery options on the West Coast and in Washington, D.C., and Philadelphia. Amazon.com??s Amazon Fresh has continued to grow its delivery service.

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