Walmart expands online grocery delivery, upping the ante in convenience wars

Walmart (WMT) is expanding its unlimited grocery delivery, which will be available in approximately 1,400 stores across 200 metro areas this fall, the retail giant said on Thursday.

Called "Delivery Unlimited," Walmart’s customers can opt to pay a yearly fee of $98, or a monthly fee of $12.95, to access unlimited grocery deliveries.

Walmart’s change means shoppers no longer have to shell out a per-order delivery fee, which ranges between $7.95 and $9.95, depending on the timeframe when they want the delivery.

However, there’s still a $30 minimum threshold per order for grocery delivery, with or without the membership.

“Grocery Delivery takes convenience to a new level, and our customers love it. With Delivery Unlimited, we’re providing incredible value for our customers and leveraging our unique assets to save them both time and money,” Janey Whiteside, Walmart’s chief customer officer, said in a press release.

This latest move by the retail giant takes aim at similar offerings from competitors like Amazon (AMZN) — with its PrimeNow — and Target's (TGT) Shipt, which provides same-day grocery delivery for orders of $35 or more. Target charges a fee of $14 per month, or $99 per year.

The retail giant clearly sees online grocery pickup and delivery as a game-changer, amid efforts to expand the popular service across its U.S. stores. The fee-based membership for unlimited delivery is seen as the next step in an evolution.

The grocery items available for Walmart's service include things like produce, meat, baked goods, pantry staples, and certain general merchandise.

"As we scaled grocery pickup in the U.S., it unlocked new capabilities like grocery delivery,” CEO Doug McMillon said in his management commentary for the second quarter.

“Customers love these services, and we’re rapidly expanding them to new locations and testing new options such as unlimited grocery delivery for a fee," he added.

Delivery Unlimited was tested in four markets, including Houston, Miami, Salt Lake City, and Tampa.

By year-end, Walmart expects to have grocery pickup at 3,100 stores and same-day grocery delivery from 1,600, covering approximately 80% and 50% of the U.S. population, respectively. Delivery Unlimited will also be available in 1,600 stores by year-end.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter. Send tips to laroche@oath.com.

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