Walmart, Target, Kroger Expanding Home-Delivery Tests

Even as Amazon plots new ways to make grocery home-delivery an option for more Americans, chains like Walmart, Target and Kroger are stepping up their efforts to win shoppers over to e-groceries.

Walmart, which started testing grocery delivery through Uber last year, says it’s expanded the pilot project to Orlando and Dallas. It’s also got tests going with associates using their own cars to make deliveries, and in other markets, is experimenting with Walmart trucks and drivers. 

And Target is expanding its Restock, the next-day essentials delivery service, to Denver and Dallas, as well as to all those in the Minneapolis area (it was previously just available for REDcard holders.) This service now includes about 15,000 nonperishable items and allows shoppers to fill up a box weighing up to 45 pounds and have it delivered the next day for $4.99. (In some markets, Target shoppers can get delivery through Instacart, which also brings home the bacon for Whole Foods Markets, BJ’s, Costco and many other chains.) 



As the discount chains try to find out the best way to solve the problem of the “last mile,” getting groceries to customers in ways that keep groceries fresh and yet don’t eat up too much of the industry’s already-slim profits, it turns out that so far, traditional grocery stores are winning.

And those stores are intensifying efforts to win e-sales. A report in the Cincinnati Enquirer says that Kroger, for example, which has been dabbling with home delivery for years, is now testing home delivery for $11.95 in the Cincinnati market using an independent service called The Grocery Runners. Like Walmart, it’s also testing delivery via Uber, and grocery delivery services Shipt and Pigeon Ship in Salt Lake City.

The average supermarket e-commerce transactions are about five times larger than those bought through Amazon, writes David Bishop, partner at Brick Meets Click, which tracks online grocery spending, in a recent report. And grocery purchases are about 20% more frequent for supermarkets than for Amazon. To catch up with supermarkets, he says Walmart will have to pick up the pace of its expansion.

Meanwhile, he notes that while online grocery sales are still a small percentage of the overall total, the percentage of active online grocery shoppers is more than 24%, up about 1.5 percentage points since 2015.

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