Walmart Investors Expect Stiffer Competition in Grocery Sector From Amazon
Investors reportedly expect increased competition in the grocery sector after Amazon’s announcement Tuesday (April 23) of a new grocery delivery subscription benefit.
Walmart and Kroger shares declined 1.8% and 2.3%, respectively, Tuesday, in moves that UBS analyst Michael Lasser said showed that investors interpret Amazon’s announcement as a sign of greater competition, Seeking Alpha reported Wednesday (April 24).
The new Amazon program offers a delivery subscription benefit in the United States for Prime members and customers using an electronic benefits transfer (EBT) card, according to the report.
“The reality is that all the leading players have been competing intensely for some time for a greater share of online grocery spend,” Lasser wrote in a Tuesday note, per the report.
Amazon’s new program, which is launching in more than 3,500 locations around the U.S., offers unlimited grocery deliveries on orders of $35 at $9.99 per month for Prime members and $4.99 per month for customers with a registered EBT card.
It encompasses orders from Amazon Fresh, Whole Foods Market, and a variety of other grocery stores and specialty retailers.
“Our goal is to build a best-in-class grocery shopping experience — whether shopping in-store or online — where Amazon is the first choice for selection, value and convenience,” Tony Hoggett, senior vice president of worldwide grocery stores at Amazon, said in a press release announcing the program’s launch.
While Amazon is trying to win over grocery shoppers by making its offering more accessible in terms of price, DoorDash is trying to do so in terms of geographic availability, PYMNTS reported Tuesday.
DoorDash announced Tuesday that it has added both Wakefern Food Corp.’s 365 locations and five new West Coast grocers to its platform, amounting to more than 100 stores.
“DoorDash strives to be a modern-day one-stop-shop that offers an efficient way to get everything needed for tomorrow’s breakfast, this weekend’s dinner party or today’s missing lunch,” Tom Pickett, chief revenue officer at DoorDash, said in a press release announcing these additions.
In another recent development in this space, Grubhub said April 18 that it is expanding its grocery presence via a partnership with online marketplace Mercato.
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