Walmart to expand grocery delivery service across the US

Retail Signs

That means it will be making deliveries from 800 stores in total.

"Sam's Club, the membership warehouse store arm of Walmart, teamed up with delivery service Instacart last month to offer same-day drop off of fresh vegetables, meat and other items to customers in Austin, St. Louis and Dallas-Ft".

Walmart has been preparing its stores for its online grocery business, re-outfitting many of them to support the service, CNBC previously reported.

Moreover, Walmart's online grocery delivery rollout will supplement the retail giant's ongoing expansion of grocery pick-up offerings, resulting in 2,200 stores that offer this service from 1,100 stores by this year. But the program's crown jewel is same-day delivery in NY.

Ward noted that Walmart is learning from its delivery services in such countries as China and the United Kingdom. It's the service equivalent of putting cartons of milk in the back of the store.

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"We are gaining new customers who might not have had access to Walmart previously", Ward said about what he's learned from the pilot test of grocery delivery thus far. With this, Walmart is following a model closer to Peapod or FreshDirect, targeting stock-up trips that can build baskets and, ultimately, profitability. But Walmart also is proving a force to be reckoned with.

And Target, through its acquisition of grocery delivery startup Shipt a year ago, is expanding same-day delivery of such items as groceries and electronics to almost every major market by the holiday shopping season. For now, younger shoppers tend to buy more groceries online, but the large majority shop in stores, Cowen said.

Relying on third-parties for delivery could ultimately be a disadvantage, however. Typically, a delivery takes four hours from the time it's ordered. The only option was to cancel the entire thing and start over, I was told.

But the Amazon threat still looms even with Walmart's sizable physical footprint on its side. Target, meanwhile, agreed to acquire delivery startup Shipt past year to expand its capabilities. Walmart's other brick-and-mortar rivals like Kroger Co and Target have invested in similar services.

Walmart's grocery delivery isn't cheap - it will cost $9.95 per order with a $30 minimum, unlike Amazon's subscription model that offers free grocery delivery to Prime members.

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