As rumored ealier this month
Photo: Robyn Beck, AFP / Getty Images
, Walmart has begun test marketing
Walmart To Go, its online grocery delivery service, in San Jose, California. In an effort to compete with the likes of Peapod, Fresh Direct and Amazon Fresh, Walmart To Go is offering aggressive pricing with delivery charges that start at five dollars, reports the New York Times
. Products include
"fresh produce, meat and seafood, frozen, bakery, baby, over-the-counter pharmacy, household supplies and health and beauty items."
The prices are impressive. The New York Times
found that a 64-ounce carton of Horizon milk was $3.50 on Walmart's site, versus $3.99 from Peapod and $4.29 on Fresh Direct. Similarly, 16 ounces of celery was only $1.98 at Walmart, with Peapod charging $3.29 and Fresh Direct $3.49. There are trade-offs, though. Customers can't always choose the number of items for purchase -- fruits like oranges and lemons are only available in large bags.
Douglas McIntyre of Daily Finance is wary
of the move, warning that it may cost the retailer impulse purchases of other items. "Walmart may pick up a new category of customers with home-delivered groceries. But it risks losing one of its best ways of luring people into its stores to buy things other than groceries," he says. The New York Times
also points out that online delivery is a tough business, citing the high-profile bust of dot-com giant Webvan in 2001, among others.
But don't count them out. Walmart has size on its side: they're the biggest grocer in the country, with about 33 percent of the United States market share.