Wal-Mart Grocery Delivery Is A Good Move

Includes: AMZN, WMT
by: Todd Sullivan

After witnessing the success Amazon (NASDAQ:AMZN) has had to date with its grocery delivery program, Wal-Mart(NYSE:WMT) is following that model and entering the space.

Amazon, which currently undercuts local supermarket prices by some 30% at their online site, ships bulk order of non-perishable items. Wal-Mart, whose service will be almost identical to Amazon and offer items like Perrier water, trade free coffee, Campbell’s(NYSE:CPB) V-8 juice, Kellogg’s (NYSE:K) snack bars, dried fruit and popcorn, as well other non-food items such as dish and body soap, will ship the items from their Sam's Club division at prices 5% lower than those currently available at Amazon.

While Amazon currently does not break out results of this division, the fact that they are testing expansion of the service to include a full line of grocery items in Seattle [HQ] would lead one to believe that it has been a success up to this point.

This is a good move for Wal-Mart as it is another growth avenue that will require minimal capital to enact. The items will be shipped by the post office or UPS (NYSE:UPS) so no fleet of truck or delivery staff it needed until such a time they decide to do fresh foods (if ever). If nothing else, it is another reason for people to visit the Wal-Mart website and research has shown once there, people will buy something, even if it is not what they went there for in the first place.