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Walmart (WMT) to Strengthen Grocery Delivery, Plans Expansion

Zacks

With Walmart Inc.’s WMT latest move to expand online grocery delivery services to more than 100 metro regions in the United Sates, there seems to be no stopping for this retail giant from bolstering grocery sales. The announcement follows the recent launches of various kitchen products and meal kits. Walmart is undoubtedly cashing in on every possible opportunity to strengthen foothold in the grocery space and ramp up delivery services.

Boosting Grocery Delivery Services

The expansion strategy will enable Walmart to reach nearly 40% of the nation’s household, by the end of this year. Currently, this service is available in six markets. The initiative is expected to provide consumers with more accessibility to Walmart’s flourishing online grocery delivery services.

Speaking of delivery services, Walmart’s efforts to enrich consumers’ experiences by providing easy shopping methods and seamless deliveries are quite praiseworthy. In fact Walmart’s warehouse unit — Sam’s Club — partnered with Instacart for providing same-day delivery services and improve sales of food products and everyday essentials. In earlier developments, the company acquired a delivery startup — Parcel, Inc. — which is a last-mile delivery service and specializes in same-day delivery for perishable and non-perishable products. Also, the company has been testing same-day deliveries with Deliv for quite some time.

Further, Walmart’s grocery pickup services have been highly appreciated by customers, giving them the flexibility to order products on the go. With plans of adding close to 1000 stores by this year for providing such facilities, the company’s pickup services are expected to receive quite a boost. Moreover, the recent kitchen product launches, including a wide variety of meal-kits, are expected to benefit from improved delivery services.

With such strong endeavors to bolster its position in the delivery services arena, Walmart seems to be striking the right chords when it comes to competing with big box retailers and more particularly with Amazon.com AMZN. In fact, similar ventures were also undertaken by Target TGT and Kroger KR, which indicates widespread popularity for grocery delivery services.



More Growth in Store?

Notably, Walmart’s consistent efforts to accelerate online business resonate well with consumers’ fast-paced lifestyle. Apart from bolstering delivery services, the company has been taking several other e-commerce initiatives, including buyouts, alliances and improved payment systems to strengthen online operations. Additionally, the company is expanding its apparel offerings and has launched an online platform for furniture and home décor products. In fact, such relentless endeavors have aided Walmart’s U.S. e-commerce sales to soar 23% in the fourth quarter of fiscal 2018. Encouragingly, management expects U.S. e-commerce sales to soar nearly 40% year over year in fiscal 2019.

Moreover, this Zacks Rank #3 (Hold) company’s strategies to continue augmenting its business size and operations have been raising investor’s optimism. Shares of the company have surged almost 25.1% over the past year compared with the industry’s rally of 19.4%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wrapping it up, the company’s ongoing strategies of expanding online services and achieving all-around growth strengthens its presence in the retail space. On that note, we expect Walmart to continue attracting more shoppers, deliver impressive performance, and sustain in investors’ good books.

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