Walmart Recruits Postmates to Help Grocery Delivery Push
Walmart (WMT) has lined up a new partner in the grocery delivery wars: Postmates.
The retailer, which last month said it would expand its grocery home delivery to some 100 U.S. metropolitan areas by the end of the year—up from six currently—and reach 40% of American households, announced on Tuesday that it would start offering delivery of online grocery orders with Postmates in Charlotte, North Carolina, ahead of a broader rollout. Postmates is just the latest tech player Walmart has teamed up with, joining the likes Uber and Deliv, who have supplemented Walmart’s own delivery firepower with service in a few top markets such Dallas, Denver, Orlando, Phoenix, Tampa and San José.
As if to illustrate how heated the grocery delivery competition has gotten, Amazon.com (AMZN) almost simultaneously announced that its Whole Foods Market chain would offer grocery delivery in the sprawling metro area encompassed by Los Angeles and Orange counties. Amazon has been trying to leverage its 2017 acquisition of Whole Foods to lift its Prime subscription with deals for members only, while also giving Whole Foods’ private brands more reach.
That has raised the heat on Walmart, which initially had centered its efforts on drive-in grocery pick-up, trying to take advantage of its sprawling store fleet. Curbside Pickup is available at 1,200 Walmart stores, with another 1,000 by the end of the year.
Rather than require membership in a program, as companies like Shipt do, Walmart simply charges a flat fee of $9.95 for delivery. That can can be as fast as three hours, and requires a minimum order of $30. Grocery delivery was something Walmart started testing years ago, with trials in Denver and San Jose.
Walmart is taking on a crowded field: everyone from sister chain Sam’s Club to Kroger to Aldi to BJ’s Wholesale is getting into the delivery wars. Target last year bought Shipt to help it offer same-day delivery.
After a customer has placed an online order with Walmart, and chosen the delivery option, trained Walmart workers will pick items, scan them as they work through the store, and then call an outside service such as Postmates, Uber or Deliv, or its own trucks, to come retrieve the order and deliver it. Walmart, the largest U.S. grocer, gets about 56% of its annual U.S. sales from its food business.