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Weak Demand for E-Grocery in U.S.: Wal-Mart

ROGERS, Ark. — While global e-commerce is “the next large growth engine” for Wal-Mart Stores, the retailer’s plans don’t yet include expanding its grocery delivery in the U.S., officials said Thursday.

Neil Ashe, president and chief executive officer of e-commerce for Wal-Mart, in a press presentation here said an ongoing test of Internet grocery ordering and delivery in California has not been met with enough consumer demand to make it a viable business in the U.S. He added, however, that in markets that support it, Wal-Mart does grocery delivery “as effectively as anyone in the world.”


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“Grocery delivery is not new for us. We know what it is and we know how to do it” Ashe said. “It requires market density – enough customers. It requires basket density – meaning you have to put enough items in that basket to make it work. And it requires route density, meaning you’ve got to put enough orders into a truck.”

Wal-Mart has been testing Internet-based grocery ordering and delivery through a store-pick model known as Walmart To Go in San Jose and San Francisco since 2011.

“We’ve proven we know how to do it,” Ashe said of the service, which remains in beta-test mode. “We haven’t proven market density – we haven’t proven that customers want it.”

Grocery delivery has worked for Wal-Mart in places like the United Kingdom, where the retailer operates Asda stores, Ashe said. But it benefited there from competitors that also offered the service.

Read more: Neighborhood Market Mulls Faster Rollout

“The reason we think grocery delivery worked in the U.K. was that so many people threw in behind it – Tesco, Asda, Sainsburys, Ocado, etc. “ he said. “So there was density and enough customers who wantd it.

“If somebody else wants to pay to develop the market [in the U.S], we are ready to go,” he added. “We can pick from our own stores and roll that capacity out in months. If the customers say that’s what they want, we are good to go.”

Officials said e-commerce for general merchandise and apparel was advancing behind new innovations, including a global infrastructure, new search and homepage designs and expanding assortments.

The company is also encouraged by early results from “Scan & Go” technology introduced earlier this year at 200 stores. Wal-Mart will release its first mobile phone applications for Scan & Go for Android devices later this month, said Gibu Thomas, Wal-Mart’s senior vice president of mobile and digital.

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