Exclusive: Wal-Mart expands online grocery pickup to eight more cities

Wed Apr 13, 2016 4:58am EDT
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By Nathan Layne

(Reuters) - Wal-Mart Stores Inc (WMT.N: Quote) is expanding free curbside pickup of groceries into eight new cities this month including Kansas City and Austin as the retailer gains confidence it can make the strategy work on a larger scale, a senior executive told Reuters.

The expansion, which includes adding stores in markets where it already has a presence, will increase the number of stores with the service by a third to about 200 and widen its footprint to 30 cities, Michael Bender, chief operating officer of Wal-Mart's e-commerce operations, said in an interview on Monday.

Bender said that Wal-Mart was preparing to expand further beyond this move, which could suggest the retailer may look to roll out the service to a more sizeable portion of its nearly 4,600 stores across the United States.

"The data we’ve collected gives us confidence that with existing customers we are getting a larger share of their wallet and that's complemented by new customers we are bringing into the fold," he said. "There will be more so stay tuned."

By focusing on in-store pickup, Wal-Mart is aiming to capitalize on its network of stores, drawing a sharp contrast with Amazon.com (AMZN.O: Quote), an online-only retailer which has struggled to find the right pricing model and is delivering groceries in a handful of cities for a fee.

Other traditional supermarkets are also trying to figure out a profitable way to sell groceries online.

Kroger (KR.N: Quote) offers pickup at 47 locations and more than a 100 stores in its Harris Teeter chain, a company spokesman said. Kroger charges $4.95 per order after the first three orders. Wal-Mart does not have pickup fees.

Bender said customer satisfaction scores in its own surveys from the 150 stores and 22 cities it had expanded to in October were in the mid to high 90's. He said the service was very popular among mothers with children who like having groceries delivered to their trunk without having to leave the car.   Continued...

The Wal-Mart company logo is seen outside a Wal-Mart Stores Inc company distribution center in Bentonville, Arkansas June 6, 2013.  REUTERS/Rick Wilking