By Sarah Nassauer
Walmart Inc. will offer home delivery of groceries in 100 cities by the end of the year and launch same-day delivery in New York City, adopting a costly model it previously resisted as Amazon, Kroger and Target invest in similar services.
Under the new program, online grocery orders will be packed in a Walmart store by company workers and then handed off to a delivery company or startup that uses contract workers to bring orders to homes, said a Walmart spokesman.
Uber Technologies Inc. will be one of the initial partners, expanding a test started in 2016. Other crowdsource delivery companies will be added later this year, the spokesman said. Walmart currently offers grocery delivery in six cities through Uber and Deliv Inc., a Menlo Park, Calif., firm.
The plan also includes using Jet, the online retailer Walmart purchased in 2016, to offer a same-day grocery-delivery service in New York City to compete with Prime Now, Amazon.com Inc.'s one- and two-hour delivery service, said people familiar with the plan.
Jet already delivers food to homes in some cities, but orders arrive via a carrier like FedEx, usually within a few days. Jet aims to expand fast grocery delivery to around 10 large cities where Walmart hasn't built a store presence like San Francisco, said one of these people, though specifics of the plan aren't yet set.
Walmart is the biggest U.S. seller of groceries but its expansion into home- delivery services follows Amazon's purchase of Whole Foods last year, a combination that spurred several traditional retailers to push delivery services more aggressively.
Over the last six months, Costco Wholesale Corp., Kroger Co. and other retailers added more cities and products shoppers can order through Instacart, a delivery startup that uses contract workers. In December, Target Corp. acquired Instacart rival Shipt for $550 million.
Amazon has also ramped up food-delivery options, allowing home delivery from Whole Foods in six metro areas over the past month. That adds to a network of Amazon grocery delivery options in dozens of cities.
Online revenue growth slowed at Walmart in the most recent quarter, causing its share price to drop and some analysts to question its strategy to compete with Amazon. Executives said Walmart was still on track to increase its e-commerce sales by 40% this year.
Instead of home delivery, Walmart has in recent years expanded curbside grocery pickup, a service that lets shoppers order online then pick up their items from their car in a store's parking lot. It offers the service at 1,200 stores and plans to add another 1,000 stores by year's end.
Walmart's grocery delivery will cost $9.95 and have a $30 minimum order. Product prices will be the same as in stores, the company said.
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