Walmart plans same-day grocery push in New York with

Key Points
  • The warehouse is slated to open in the Bronx neighborhood this fall.
  • The center will only handle Jet deliveries, not Walmart orders, to start.
  • Walmart acquired roughly two years ago to target more urban markets and millennial shoppers.
Employees collect items for customer orders at the Inc. fulfillment center on Cyber Monday in Kansas City, Kansas.
Daniel Acker | Bloomberg | Getty Images

Walmart's is testing same-day grocery delivery in New York, as it dials up its efforts in the battle for online customers.

The retailer announced Tuesday that it will open up a fulfillment center in the Bronx for, the e-commerce start-up it acquired roughly two years ago. The fulfillment center will serve as the base for the delivery of goods like groceries and Apple electronics.

The move comes as Walmart has been investing heavily in its online grocery business. It previously announced plans to expand its online grocery delivery service to a fleet of roughly 800 stores by the end of the year. It has also been re-outfitting its stores to support mobile and online delivery, as well as converting some of its Sam's Clubs into distribution centers for Walmart's online grocery business.

As of now, though, the Bronx warehouse will only store Jet inventory and the service will only deliver Jet goods.

For Jet and other players in the online grocery market, New York offers a relatively easy location to build out the service. The delivery of fresh food is infamously difficult, because meat, fruits and vegetables can easily spoil or get damaged en route to consumers. In dense cities like New York, though, cars can reach many people within short distances. Other services like FreshDirect have also used New York as a test market for the business, building it out from there.

To support its efforts, Jet is partnering with a delivery service Walmart acquired last year called Parcel. The company uses technology that provides customers with live updates about delivery status. It says it uses routing algorithms and a workforce to sort and load packages.

At the time of the deal, Walmart said it was testing same-day delivery of certain products in New York.

The efforts in New York will also help Jet's push to appeal to "urban millennials," a subset separate from Walmart's traditional rural or suburban shoppers. Those efforts include Walmart's private-label brand Uniquely J.

The Wall Street Journal first reported on the news.