The Cincinnati Business Courier reports that Walmart is challenging Kroger in the e-commerce battlefield right in its own backyard, bringing its click-and-collect service to four stores in the Cincinnati market. This will compete with the dozen locations in the area where Kroger is offering a click-and-collect service.
The story suggests that "Wal-Mart has a twist that gives it an edge on Kroger in the convenient shopping battle. Wal-Mart’s service is completely free. Kroger charges $4.95 per order, but the first three orders are free."
The story notes that "Kroger and Wal-Mart are fierce competitors in the grocery business. Kroger has been rapidly gaining share from Wal-Mart in recent years. Kroger has increased same-store sales minus inflation by an average of around 3 percent each quarter, according to a recent Goldman Sachs study. Wal-Mart’s same-store sales less inflation averaged a decline of about 1 percent per quarter. And Goldman Sachs found that Wal-Mart’s prices are only about 1.2 percent cheaper than those at Kroger, where selection and service are considered to be superior."
Walmart has brought click-and-collect to "several hundred" stores around the country, the story says, while Kroger is offering it at 269 stores in 25 markets around the country.
The story suggests that "Wal-Mart has a twist that gives it an edge on Kroger in the convenient shopping battle. Wal-Mart’s service is completely free. Kroger charges $4.95 per order, but the first three orders are free."
The story notes that "Kroger and Wal-Mart are fierce competitors in the grocery business. Kroger has been rapidly gaining share from Wal-Mart in recent years. Kroger has increased same-store sales minus inflation by an average of around 3 percent each quarter, according to a recent Goldman Sachs study. Wal-Mart’s same-store sales less inflation averaged a decline of about 1 percent per quarter. And Goldman Sachs found that Wal-Mart’s prices are only about 1.2 percent cheaper than those at Kroger, where selection and service are considered to be superior."
Walmart has brought click-and-collect to "several hundred" stores around the country, the story says, while Kroger is offering it at 269 stores in 25 markets around the country.
- KC's View:
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When I talk to people about this battle, the consensus seems to be that Kroger has the competitive advantage over Walmart and overall, perhaps nowhere more than in Cincinnati, where there is a lot of hometown pride in the company. But the one thing Kroger cannot do - and won't do, I'm sure - is underestimate the degree to which Walmart seems to be committed to the e-commerce category in general.
Walmart's folks know that in many places, longtime competitive advantages have been eroded by retailers that have figured how how to be sharp on price, right on selection, and strong on convenience and value (in all the different ways that these can be defined). Management there seems to be committed to doing whatever is necessary - even spending $3.3 billion on an as-yet unproven startup - to counteract these trends.
It's a jungle out there, and it only is going to get tougher for everyone to survive.
