Spend

Walmart's grocery delivery costs over 20% less than either Amazon or Peapod

A Walmart personal shopper choses bananas for an online grocery order.
Source: Walmart

This week Walmart announced it's expanding its grocery delivery service, but how does it compare to other offerings from major players like Amazon and Peapod?

To find out, CNBC Make It compared prices listed online from Amazon Prime Now, Peapod and Walmart for delivery in the Northern New Jersey area. We crunched the numbers on 25 everyday grocery items, looking at a mix of national brands and each retailer's store brands, as well as both organic and traditional products.

When it comes to price, Walmart's old advertising slogan "Always Low Prices" still holds true. A cart of nearly identical items delivered to your doorstep from the big box store cost 31% less than Amazon Prime Now and 22% less than Peapod.

Here's an in-depth look at the three delivery services, from least to most expensive:

Walmart Grocery

  • Upfront cost: $0 for regular service, $98 annual fee for "unlimited" grocery delivery service coming this fall
  • Delivery Fee: $9.95 for same-day delivery on orders over $30, otherwise $7.95 for next-day deliveries
  • Delivery availability: Delivery available for 200 metro areas near Walmart locations in 45 states nationwide.

If you can't get to the store, Walmart is proving to be the cheapest grocery delivery option on the market. A cart full of 25 items from a Walmart location in Northern New Jersey came in at just $55.65, plus $9.95 for same-day delivery. And Walmart offered the least expensive option for 19 of the 25 products when comparing the unit price of each item.

When it comes to delivery, Walmart is upping its game. Currently, the retailer provides grocery delivery, but it's rolling out a new "unlimited" option that will give regular shoppers the option to skip the fees. Plus the retailer plans to increase the number of locations that offer the service, with a goal to reach 50% of Americans by the end of the year.

A Peapod worker at one of its online distribution facilities in Lake Zurich, Ill.
Tim Boyle | Bloomberg | Getty Images

Peapod

  • Upfront cost: $0 for regular service
  • Delivery Fee: $9.95 for same-day and next-day deliveries on orders over $60, $6.95 for orders over $100
  • Delivery availability: Available in 24 metro markets of Connecticut, Illinois, Indiana, Massachusetts, New Hampshire, Maryland, New York, New Jersey, Pennsylvania, Rhode Island, Virginia, Wisconsin and Washington D.C.

Peapod, like Instacart, is a grocery delivery service available through a number of regional supermarket chains, including Stop & Shop, Food Lion and Giant Food Stores. The service allows customers to take advantage of the loyalty programs and savings at these stores, which helps keep costs low. A basket of the 25 groceries we compared came to about $72 from a Stop & Shop location in Northern New Jersey.

But this program is definitely designed for serious grocery shoppers. To get Peapod groceries delivered to your doorstep, you'll need to spend a minimum of $60, as opposed to the $30 minimum required by Walmart. Amazon Prime orders over $35 qualify for free delivery.

A detail of the Amazon Prime Now home page
Source: Amazon

Amazon Prime Now

  • Upfront cost: Included in Prime membership ($119/year)
  • Delivery Fee: Free for 2-hour delivery on orders over $35, otherwise starts at $4.99
  • Delivery availability: 1-hour and 2-hour delivery windows available in 88 major metros across the U.S.

Amazon's Prime Now service is the most expensive of the three we evaluated, but we previously found it's actually cheaper than many of the other grocery delivery services on the market, including Instacart and FreshDirect.

And it's important to note that price is not the only relevant factor: Quality matters as well. Even though we tried to compare almost identical products at each retailer, Prime Now's offerings from Whole Foods, more often than not, were of a higher caliber. For example, the 365 Everyday extra virgin olive oil is a cold processed Mediterranean blend, as opposed to oils from unspecified regions offered by both Walmart and Peapod.

To access this online grocery delivery service, you do have to be a Prime member — which comes out to be roughly $10 a month. But for those who opt in, Prime Now is not a bad deal, particularly if you're focused on high quality groceries. The total for 25 products purchased from a nearby Whole Foods came to roughly $80.

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