Re­tailer to ex­pand num­ber of stores of­fer­ing the on­line ser­vice

USA TODAY International Edition - - MONEY - Charisse Jones Con­tribut­ing: Kevin McCoy

Shop­pers who buy produce and poul­try on­line will be able to pick up their or­ders at 1,100 lo­ca­tions by the end of this year. That num­ber will nearly dou­ble in 2018.

As com­pe­ti­tion in the gro­cery space heats up, Wal­mart isn’t ced­ing any ground to Ama­zon, say­ing that shop­pers will be able to pick up gro­ceries or­dered on­line at 1,000 more stores in the U.S. start­ing next year.

Com­pany ex­ec­u­tives told in­vestors Tues­day that gro­cery is key to hook­ing cus­tomers who may then go on to pur­chase the cos­met­ics, cloth­ing and var­i­ous other prod­ucts that fill its shelves.

“If you could of­fer fresh produce ... with the very best prices, with a re­ally good ex­pe­ri­ence whether it be pick up or de­liv­ery, then you have a good chance to build a long-stand­ing re­la­tion­ship that you can then lev­er­age to sell the rest of gen­eral mer­chan­dise,” Marc Lore, pres­i­dent and CEO of Wal­mart eCom­merce U.S., said at the an­nual in­vestors meet­ing in Ben­tonville, Ark. “I think we have an ad­van­tage.’’

Wal­mart, the world’s big­gest re­tailer, has been in a fierce bat­tle with on­line gi­ant Ama­zon, buy­ing up niche e-com­merce sites while also tout­ing the ad­van­tage of hav­ing a fleet of ac­tual stores.

The big box chain is more than three times big­ger than Ama­zon based on rev­enue and is the largest gro­cery re­tailer in the U.S. But Ama­zon, cur­rently the fifth-big­gest player in the U.S. gro­cery space, bought Whole Foods for $13.7 bil­lion in Au­gust, spark­ing spec­u­la­tion that it would use the premium su­per­mar­ket chain’s 468 lo­ca­tions to ex­pand Ama­zon’s gro­cery de­liv­ery ser­vice.

Since then, Wal­mart has been busy mak­ing its gro­cery of­fer­ing more con­ve­nient.

It an­nounced last month that it is test­ing a ser­vice in north­ern Cal­i­for­nia in which driv­ers not only de­liver on­line or­ders, in­clud­ing gro­ceries, but will put the meat, milk and eggs right in the customer’s re­frig­er­a­tor.

Shop­pers who buy produce, poul­try and other items on­line will be able to pick up their or­ders at 1,100 lo­ca­tions by the end of this year, and that num­ber will nearly dou­ble in 2018.

Even as it makes the most of its brick-and-mor­tar foot­print, Wal­mart is see­ing sig­nif­i­cant suc­cess on­line, say­ing Tues­day that it pre­dicts it will see a roughly 40% in­crease in e-com­merce sales in the U.S. next year.

Wal­mart shares surged more than 3.7% to $83.52 in morn­ing trad­ing af­ter the an­nounce­ments. It closed the day up $3.60 to $84.13.

The big-box re­tailer ex­plained it will con­tinue to fo­cus on re­mod­el­ing ex­ist­ing stores and in­cor­po­rat­ing “dig­i­tal ex­pe­ri­ences” in place of build­ing new lo­ca­tions.

Wal­mart also told in­vestors that it con­tin­ues to project that ad­justed earn­ings should range be­tween $4.30 and $4.40 per share this fis­cal year.

“It is clear that Wal­mart in­tends to con­tinue to turn up the heat on­line, with 40% an­nual growth an im­pres­sive goal, es­pe­cially on the heels of the 30% out­lined at the 2016 in­vestor meet­ing,” said Char­lie O’Shea, the lead re­tail an­a­lyst for Moody’s. “We still be­lieve Ama­zon’s lead in on­line re­tail is in­sur­mount­able; how­ever, Wal­mart con­tin­ues to widen the gap be­tween it­self and all other brick-and-mor­tar re­tail­ers (with) its un­matched phys­i­cal re­sources ... and in the process is pro­vid­ing con­sumers with a com­pelling on­line al­ter­na­tive.”


Wal­mart em­ployee Yur­din Ve­lazquez re­turns gro­cery carts to a store in Mi­ami. Wal­mart is the largest gro­cery re­tailer in the United States and is more than three times big­ger than Ama­zon, based on rev­enue.

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