Arkansas Democrat-Gazette

Wal-Mart wants food shoppers to go online

Success in U.K. spurs push in U.S.

- CHRIS BAHN

For more than 15 years, grocery home shopping has been offered in the United Kingdom through Wal-Mart Stores Inc. grocery chain Asda. Today, more than 97 percent of the U.K. has access to online grocery shopping and various pickup and delivery options.

Shopping for groceries from home — which encompasse­s both pickup and delivery after placing an order — continues to grow at a rapid pace in the U.K. Wal-Mart CEO Doug McMillon said the service continues to experience double-digit growth each quarter for Asda, which Wal-Mart acquired in 1999.

With that market seemingly mastered, Wal-Mart has turned its attention to other countries that might be a good fit for online grocery pickup and delivery. Internatio­nal CEO David Cheesewrig­ht told investors last week that the retailer is working to leverage its U.K. success elsewhere through the creation of an “Internatio­nal Accelerati­on Team.”

Based in the U.K., the team is working to “speed up the adoption of grocery home shopping processes and technologi­es.”

“We’re now working towards a common technology platform to better position us for the expansion of grocery

home shopping,” Cheesewrig­ht said.

Expansion in the U.S. appears to be a priority. Currently the retailer, which gets 56 percent of its annual U.S. revenue from grocery sales, is testing delivery and pickup options in five markets.

Wal-Mart offers home delivery in San Jose, Calif. Denver customers have both pickup and delivery options after ordering online. Huntsville, Ala., and Phoenix are test locations for curbside pickup and Bentonvill­e is home to a dedicated grocery pick-up location.

Asda shoppers in the U.K. have the option of picking up grocery orders after exiting the subway stop. McMillon spoke of that offering during the 2014 shareholde­rs meeting and during a Tuesday call with investors he spoke of taking the successes in the U.K. and “sharing this expertise around the world to test delivery and pickup services in more locations.”

As Wal-Mart has introduced new concepts related to online shopping, it has often been criticized for lagging behind its competitor­s. WalMart’s recent launch of a $50 subscripti­on annual delivery service, for example, was immediatel­y compared to Amazon’s Prime program. Amazon Prime users pay $99 a year for unlimited shipping and media streaming services.

Amazon announced onehour grocery delivery in Manhattan on Thursday. It’s an expansion of a one-hour delivery service — Prime Now — being offered in Atlanta, Austin, Baltimore, Brooklyn, Dallas, and Miami. Whole Foods announced last year one-hour delivery in 15 cities, and other traditiona­l grocery chains are looking at click-and-collect options for customers.

For all the innovation­s and pilots being launched by competitor­s, experts think Wal-Mart is well-positioned to be a leader.

“I don’t think Wal-Mart is behind here,” said Brian Yarbrough, retail analyst for Edward Jones. “I do think grocery delivery is for a core set of customers. I don’t think the market is as big as it is online for general merchandis­e, but there’s definitely an opportunit­y there.”

A big part of the opportunit­y is taking lessons learned in the U.K. and figuring out how to apply them here. Experts say that the delivery component of home grocery shopping is more challengin­g to execute in the U.S. for a number of reasons. Climate and geographic difference­s present a challenge as does a driver shortage in the shipping industry.

Still, taking lessons learned from U.K. delivery and applying

them domestical­ly and in other markets makes sense for Wal-Mart. It also underscore­s a strength the retailer has compared with its many competitor­s, said Carol Spieckerma­n , president of retail strategy firm newmarketb­uilders.

“One of Wal-Mart’s biggest advantages is its global presence and ability to test and refine concepts around the world then bring them to the U.S.,” Spieckerma­n said. “WalMart is smart to formalize the sharing of best practices among its global units. That said, the competitio­n that Wal-Mart faces in myriad customer convenienc­e models including ship-to-store, home delivery and drive-through pickup will only increase. Wal-Mart can’t just think in terms of expanding upon its own success; it must also fend off a growing number of rivals including Google, Peapod, Instacart, Blue Apron and a slew of upstarts that will continue to sprout up as various concepts are perfected.”

Wal-Mart executives believe Asda has come close to mastering those concepts. Thanks to Asda’s success, countries won’t have to invent their own grocery home shopping services, which Cheesewrig­ht said will allow for faster and more efficient growth.

“There’s a lot of great learning there,” Cheesewrig­ht said of Asda’s success.

 ?? Special to the Democrat-Gazette/FRED MILLER ?? Soybean breeder Pengyin Chen (right) peels edamame soybeans with program technician David Moseley for display at a 2013 field day at the vegetable research station near Kibler.
Special to the Democrat-Gazette/FRED MILLER Soybean breeder Pengyin Chen (right) peels edamame soybeans with program technician David Moseley for display at a 2013 field day at the vegetable research station near Kibler.
 ?? NWA Democrat-Gazette/DAVID GOTTSCHALK ?? Bentonvill­e is home to a dedicated Wal-Mart grocery pickup location. The company is working on expanding its pickup and delivery grocery services.
NWA Democrat-Gazette/DAVID GOTTSCHALK Bentonvill­e is home to a dedicated Wal-Mart grocery pickup location. The company is working on expanding its pickup and delivery grocery services.

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