Grocery stores are locked in fierce competition and many are counting on online orders as the main driver. Many national grocery chains, including Albertsons, Kroger, and Amazon’s Whole Foods, have made big investment bets in warehouse technology and last-mile delivery networks that appeal to time-strapped consumers.
So it’s no surprise that Walmart’s recent results have been turbocharged by online grocery orders as well. What may be surprising, though, is how much grocery and food has become such a big part of Walmart’s impressive performance. This will only get better as its order fulfillment infrastructure improves with enhanced technology and finely tuned delivery systems.
A Grocery Dive article, excerpted below, discusses more on the topic:
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Walmart’s third quarter revenue rose 2.5% year over year to $128 billion, the company reported Thursday. At Walmart, U.S. top-line sales jumped 3.2% to $83.2 billion, while comp sales rose 3.1% (including fuel) for the U.S. unit.
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E-commerce sales in the U.S. went through another large expansion, growing 41%. Sales growth was slower at Sam’s Club, which posted a 0.7% increase in total sales and a 0.8% increase in comps (including fuel).
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The retail giant now offers pickup from roughly 3,100 locations and same-day grocery delivery from more than 1,400 stores. Services like in-home deliveryand an “unlimited” delivery subscription have rolled out in recent months, with the aim of deepening customer loyalty as Amazon ramps up its grocery services, including a new grocery chain due next year and free Fresh service for Prime members.
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Within grocery, product innovation and price investments are driving customer interest. The retailer noted snacks, beverages and fresh foods were top performers in Q3, while private label “increased penetration” and “continues to drive strong sales along with our expanding omnichannel offering.” Comp sales in grocery increased in the mid single digits, the company noted.
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“Our strength is being driven by food,” CEO Doug McMillon said in prepared comments.
Overview by Raymond Pucci, Director, Merchant Service at Mercator Advisory Group