Oct 30, 2023 - Economy

Walmart expands grocery pickup areas in stores

Illustration of a grocery bag speeding into the frame.

Illustration: Gabriella Turrisi/Axios

Walmart is devoting more of its floor and retail space to online grocery pickup and delivery, the company announced Monday.

Why it matters: Grocery sales have helped the chain win over customers during high inflation — particularly high income consumers — while also giving the company a new edge in online sales over Amazon.

  • As of this summer, Walmart's e-commerce business grew 24% from last year.
  • Over roughly the same time period, Amazon's online sales growth was in the single digits.

Be smart: The retail giant has also been investing in picking and packing technology that can turn its stores into small fulfillment centers for online orders, as it looks to grow its e-commerce capabilities.

  • Walmart currently has about 4,700 stores across the U.S.

The big picture: The updates are part of Walmart's $9+ billion, 2-year investment to remodel more than 1,400 stores U.S. stores, the company said in a statement. Changes include...

  • More shopping carts, more self-checkout areas, and the addition of mother's rooms which associates can also use;
  • New dollar shops at store entrances, as well as the relocation of some pharmacies to the front of stores, which have been enlarged with new private screening rooms.

While not all of the remodeled stores have the same slate of upgrades, most locations will benefit from the majority of the changes, a spokesperson tells Axios.

What to watch: Walmart is leaning into higher income consumers.

  • Taking home decor products out of their boxes and staging them in specific displays is a page out of Target's playbook, for example, and a part of Walmart's remodeling plans.

Worth noting: Investors have been happy to stick with Walmart through bouts of economic uncertainty.

  • Walmart's stock is up 14.5% over the past 12 months.
  • Meanwhile, the broader sector, reflected through the S&P Retail Select Industry Index, is down more than 6.8%.

Go deeper: Walmart's advantages over Amazon at the moment are hitting all the sweet spots in consumer behavior

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