Over the weekend Wal-Mart quietly launched an online grocery delivery service called Wal-Mart to Go, which could prove to be a tough competitor for Fresh Direct. Wal-Mart is by far the biggest grocer in America; the Times reports that the chain controls about 33 percent market share in the United States. Wal-Mart's online grocery inventory is more diverse than Fresh Direct (12 varieties of Triscuits, compared to Fresh Direct's measly two kinds!) and right now the prices are competitive— the Times found sixteen ounces of celery at Wal-Mart to Go fo $1.98, compared to $3.49 through Fresh Direct. With a Wal-Mart in the works for Brooklyn, some New Yorkers may soon be tempted to reevaluate their contempt for the corporate chain.
Wal-Mart executives are keeping tight-lipped about their new grocery delivery service, but back in March one senior V.P., Steve Nave, told the Times, "One of the great things about Wal-Mart is we’ll put something out there, test and learn from it. I would say nothing is off limits." Heh, that's not ominous at all! Right now the company is only testing the service in San Jose, California, but some analysts are already wondering how this might hurt Wal-Mart's bottom line. "A customer who goes into the store for food may also decide to buy a pair of shoes or use its pharmacy," writes Douglas McIntyre at Daily Finance, who thinks this is a bad move for Wal-Mart. "The option of ordering groceries online will almost certainly reduce the number of in-person visits to Walmart stores, which in turn will eliminate some of the casual purchases these people would have made."
Other companies have found the online delivery game to be more trouble than its worth. Supervalu stopped offering online grocery delivery in 2009 after determining that people preferred shopping in person, and grocery delivery service Webvan went bust in 2001. Consultant Craig Johnson tells the Times, "These are not simple operations to set up profitably, as Webvan and a host of others have found out over the years." But if Walmart ever does open that controversial location in East New York and brings a grocery delivery service that rivals Fresh Direct, it will be interesting to see how many ardently anti-corporate New Yorkers change their tune. 12 varieties of Triscuits?! COME ON!
