Walmart Stock Slides As Amazon's Grocery Delivery Expansion Heats Up Price War And Challenges Margins
Walmart's stock fell over 2.4% to $101.10 as Amazon expanded its grocery delivery service to all customers in over 3,500 cities, intensifying competition and pressuring margins. In response, Walmart broadened its employee discount to include nearly all grocery items, effective immediately. This move aims to enhance competitiveness against Amazon and Target amid rising food prices. Despite the stock drop, Walmart has seen a nearly 13% gain year-to-date, outperforming the S&P 500 Consumer Staples Sector Index.
Walmart WMT stock dropped after Amazon.com AMZN expanded its U.S. grocery delivery service to all customers in over 3,500 cities.
Amazon previously limited the service largely to Prime members. The Seattle-based conglomerate now offers same-day delivery from Amazon Fresh and Whole Foods to everyone (Prime members receive lower fees).
The move leverages Amazon’s scale to capture more grocery market share and pressures rivals’ pricing and margins.
Meanwhile, Walmart expanded its employee discount to cover nearly all grocery purchases made in-store and online.
Effective immediately, the country’s largest private employer now applies its 10% discount—previously limited to fresh produce and general merchandise—to year-round purchases of items like milk, pasta, frozen pizza, and meat.
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This was “one of our most requested benefits,” according to Walmart Chief People Officer Donna Morris.
U.S. employees become eligible after 90 days of employment. Clearance items are excluded, the Wall Street Journal reported.
Walmart announced the update to store managers at a holiday-season planning meeting in Houston, positioning itself closer to competitors such as Target TGT and Amazon-owned Whole Foods, which offer broader and sometimes higher discounts from day one. The move comes amid elevated prices for food staples despite a recent pause in monthly inflation, as reported in the July consumer price index.
The retailer has recently introduced a series of benefits, including higher store manager pay and new bonus opportunities for hourly staff.
Walmart stock gained nearly 13% year-to-date, topping the S&P 500 Consumer Staples Sector Index’s over 6% returns.
Price Actions: Walmart stock was down over 2.4% at $101.10 at last check on Wednesday. AMZN is up 1.05%.
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