Walmart to expand grocery delivery business to 800 stores by year's end

Key Points
  • The service will be in 100 metro areas by the end of the year, according to Walmart.
  • Orders will be packaged by "personal shoppers" in stores, and delivery is being crowdsourced from partners such as Uber.
  • Amazon-owned Whole Foods, Kroger and Target, meanwhile, are investing in some of the same initiatives.
Source: Walmart

Walmart plans to expand its online grocery delivery service to a fleet of roughly 800 stores by the end of the year, as competition continues to ramp up in the digital grocery aisle.

The expansion will open up the retailer to 100 metropolitan areas, reaching more than 40 percent of U.S. households. It will offer shoppers same-day delivery of fresh produce, meat and seafood, along with non-perishable items.

Walmart's grocery delivery business will be supported by a number of partners, including Uber, the company said on Wednesday. It has already been working with Uber as it has piloted its efforts.

The announcement comes just weeks after Amazon added two cities to its new Amazon Prime grocery delivery service, bringing the total number up to six. Other retailers such as Kroger and Target have been partnering with third-party providers such as Instacart, Deliv and Shipt.

Walmart has been preparing its stores for its online grocery business, re-outfitting many of them to support the service, CNBC previously reported. Those stores will be the first to introduce the program, Tom Ward, the vice president of Walmart's digital operations in the U.S., said on a call with members of the media.

It expects to make online order pickup of groceries available at about 2,200 stores before 2019.

"We will ... reach as many households as we can," Ward said. "We will leverage our footprint where it makes the most sense."

To order groceries online from and have them delivered, a shopper will pay a flat delivery fee of $9.95, and a basket must contain at least $30 worth of items. Orders can also be placed via a Walmart Grocery app. There is no subscription required, as is the case for Amazon Fresh and a handful of other, more costly options on the market.

For packing the items together in stores, Walmart will use its collection of more than 18,000 "personal shoppers." Ward said more workers are moving into that position on a weekly basis, as more Walmart stores are outfitted to fulfill orders via its website.

"We are gaining new customers who might not have had access to Walmart previously," Ward said about what he's learned from the pilot test of grocery delivery thus far. The service was being offered in Dallas, San Jose, Denver, Phoenix, Tampa and Orlando.

For shoppers who are new to the program when it rolls out later this year, Walmart is offering $10 off a first order of $50 or more, and free delivery if a basket also meets that threshold.