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Walmart Wants More Online Shoppers

Successful online grocery pickup and delivery at its Asda stores spurs expansion to additional markets.
May 26, 2015

​SPRINGDALE, Ark. – Walmart’s Asda grocery chain in the United Kingdom has been offering online grocery shopping more than 15 years, with nearly the entire country having access to online shopping, pickup and delivery options. Now, the retailer says it wants to leverage its U.K. success in other markets through its “International Acceleration Team,” reports the Northwest Arkansas Democrat Gazette.

Online grocery shopping for groceries, which includes both pickup and delivery options, is growing at a “rapid pace,” according to U.K. Walmart CEO Doug McMillon. The service continues to experience double-digit growth each quarter for Asda, which Walmart acquired in 1999. Now, Walmart is setting its sights on other countries where its service might be a good fit.

International CEO David Cheesewright told investors last week the company’s new International Acceleration Team is working to "speed up the adoption of grocery home shopping processes and technologies,” and is now “working towards a common technology platform to better position us for the expansion of grocery home shopping.”

The news source writes that expansion in the United States appears to be a priority. Walmart receives 56% of its annual U.S. revenue from grocery sales and is testing delivery and pickup options in five markets, including home delivery in San Jose, California; online ordering, pickup and delivery in Denver; Huntsville, Alabama, and Phoenix are test locations for curbside pickup; and Walmart hometown Bentonville is home to a dedicated grocery pick-up location.

Walmart has often been criticized for “lagging behind its competitors” in online grocery shopping. However, some experts believe Walmart is well-positioned to be a leader in click-and-collect grocery options. “I don't think Walmart is behind here," Brian Yarbrough, retail analyst for Edward Jones, told the news source, adding, "I do think grocery delivery is for a core set of customers. I don't think the market is as big as it is online for general merchandise, but there's definitely an opportunity there."

Taking the lessons it has learned from U.K. delivery and applying them in other markets also makes sense for the retailer. "One of Walmart's biggest advantages is its global presence and ability to test and refine concepts around the world then bring them to the U.S.," Carol Spieckerman, president of retail strategy firm newmarketbuilders, told the news source. "Walmart is smart to formalize the sharing of best practices among its global units. That said, the competition that Walmart faces in myriad customer convenience models including ship-to-store, home delivery and drive-through pickup will only increase. Walmart can't just think in terms of expanding upon its own success; it must also fend off a growing number of rivals including Google, Peapod, Instacart, Blue Apron and a slew of upstarts that will continue to sprout up as various concepts are perfected."

Thanks to Asda's success, other countries won't need to create their own home grocery shopping services, which Cheesewright says will allow for faster and more efficient growth. "There's a lot of great learning there,” she told the news source.