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Wal-Mart to test online grocery sales market |
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Financial Times 25-Oct-2007 By Jonathan Birchall in New York Wal-Mart (NYSE: WMT - News) , the largest US retailer, is dipping its toes into online grocery sales, with the expansion of a home delivery service for products including Perrier water and free-trade coffee at Sam's Club, its membership warehouse store. Sam's Club, which targets both small businesses and families, has expanded its offering of non-perishable items, which now includes Campbell's V-8 juice, Kellogg's snack bars, dried fruit and popcorn, as well other non-food items such as washing-up liquid. The retailer delivers by parcel service, following the model adopted by Amazon, the largest online retailer, which launched an online grocery store for bulk orders of non-perishable food last year. Amazon now sells more than 22,000 different items on its US website. It does not break out sales for the category. Sam's Club said it currently had 750-1,000 items, but that its online range was expanding. Amazon's online bulk groceries frequently undercut supermarket prices by about 30 per cent, and also offers free shipping for larger orders. Sam's Club, which charges an annual membership fee of $40 for families, is undercutting Amazon by about 5 per cent. The development of direct shipping of groceries contrasts with the slow growth of home delivery of online groceries, where the US has lagged behind the UK and parts of Europe. However, this summer Amazon also started testing home delivery of a full range of groceries in select neighbourhoods in its home town of Seattle using its own trucks. In the US, the online grocery sector witnessed the spectacular bankruptcy of WebVan in 2001, after it lost more than $800m as it tried to build a national distribution network. Companies: Wal-Mart Stores Inc ;Wal-Mart Stores Inc ;Ticker Symbols: us:WMT; NYSE:WMT; Industries: Limited-Service Eating Places; Snack & Nonalcoholic Beverage Bars; Accommodation & Food Services; Electronic Shopping & Mail-Order Houses; Coffee & Tea Mfg; Bottled Water Mfg; Food & Beverage Stores; Retail Trade; Grocery Stores; Food Services & Drinking Places; Nonstore Retailers; Grocery exc Convenience Stores; Subjects: Small Business; Company News; FT.com Copyright The Financial Times Ltd. All rights reserved. |
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