Walmart to offer membership service to rival Amazon Prime

This undated file photo shows Walmart's sign in front of its Bentonville headquarters.
This undated file photo shows Walmart's sign in front of its Bentonville headquarters.

Walmart Inc. is creating its own paid membership program to rival Amazon Prime, a Walmart spokeswoman confirmed Thursday. The new service, called Walmart+, is the latest move in an ongoing thrust-and-parry battle for U.S. e-commerce dominance between Walmart and Amazon.com.

The spokeswoman couldn't provide any further details on the new program, but Vox, the news website that first reported on it, said the Bentonville retailer plans to start publicly testing it next month. Testing is said to include offering perks not available to Prime members, such as discounts on prescription drugs at Walmart pharmacies and on fuel at Walmart gas stations.

Walmart+ will build on the subscription grocery delivery option the retailer debuted last year. Called Delivery Unlimited, the service costs $98 a year or $12.95 per month. That program, in turn, was an expansion of Walmart's grocery delivery service now available in more than 1,600 places.

Amazon.com introduced its Prime membership in 2005. At $119 a year, it includes free two-day shipping on millions of items and free same-day delivery in certain ZIP codes, as well as access to e-books, music and video-streaming content.

Prime also offers free delivery of groceries from Amazon-owned Whole Foods Market for orders of $35 or more. However, that service, called Amazon Prime Now, is only available to members in 84 U.S. metropolitan areas.

Amazon's other subscription grocery option, Amazon Fresh, is available to Prime members. The service initially cost members an extra $14.95 per month, but Amazon dropped that fee last fall. It also offers free grocery delivery on orders of $35 or more, but is available only in select markets. And unlike Prime Now, Amazon Fresh delivers groceries from Amazon fulfillment centers, though some products may have a Whole Foods label, according to Consumer Reports.

Target Corp. also offers a grocery delivery subscription through its subsidiary Shipt for $99 a year. Shipt delivers groceries from a number of partner stores and supermarket chains, including H-E-B, Meijer, Costco and CVS Pharmacy.

Walmart by far dominates U.S. grocery market share, which makes up more than half its in-store sales. And its popular store pickup option for orders placed online continues to drive the retailer's e-commerce sales, according to Vox.

On the other hand, Prime membership now tops 150 million worldwide, according to Amazon. Walmart has not said how many Delivery Unlimited subscribers it has.

Business on 02/28/2020

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