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Walmart Offers Competitive $98/Year Grocery “Delivery Unlimited” Service

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Coresight Research

Key Points

Walmart is testing an unlimited grocery delivery service in select US markets called “Delivery Unlimited.”

  • Walmart subscribers pay an annual fee of $98 or a monthly charge of $12.95 for unlimited delivery of online grocery orders.
  • Driven by online grocery, Walmart’s e-commerce sales jumped 37% in 1Q20, and the company expects e-commerce sales to grow another 35% in FY20.
  • Separately, Target last week expanded its same-day delivery service, which costs $9.99 per order.

Walmart is testing “Delivery Unlimited,” a new unlimited grocery delivery subscription service in three US cities: Miami, Salt Lake City and Tampa.

Whereas Walmart customers could previously pick up online grocery orders free in store or pay up to $9.95 per order for delivery, Delivery Unlimited subscribers can receive a year of unlimited delivery for a flat fee of $12.95 per month or $98 annually. This fee is lower than the $119 per year or $12.99 per month for an Amazon Prime membership. There is no restriction on the number of deliveries and the service is also available on the Walmart Grocery app. Unlike Amazon, Walmart currently does not offer special discount pricing for students.

At the end of 1Q20, Walmart had 2,450 grocery pickup locations, in addition to nearly 1,000 stores with grocery delivery and more than 900 in-store pickup towers. Driven by a strong performance in online grocery, Walmart reported a 37% jump in its e-commerce sales in 1Q20 and expects a further 35% expansion in e-commerce revenue in FY20.

Rather than building its own team, Walmart is partnering with several delivery companies across the country, including Postmates and DoorDash. The company previously worked with Uber and Lyft for delivery.

Separately, Target announced last week that it would expand same-day delivery service for online orders. The company previously offered the service via Shipt, a delivery company it acquired in 2017, charging members $99 per year. Now, customers can pay $9.99 per order for same-day delivery.

Instacart offers a similar service, Instacart Express, for $99 a year, reduced from $149 last year.

Compared with other options, Walmart’s $98 annual membership fee for unlimited grocery delivery appears competitive; however competitors may respond by reducing their fees further.

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