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On Amazon's heels, Walmart expands grocery pickup service

The company moves into eight new markets, including Kansas City, Boise and Austin.

Walmart is playing catch-up in online grocery services.
Francis Joeph Dean/Deanpictures

With a host of new players in the online groceries game, Walmart will need to speed up its services if it wants to keep up with the Internet.

To that end, the big-box retailer said Wednesday it will introduce its grocery drive-up service to eight more US markets this month: Kansas City; Boise, Idaho; Richmond and Virginia Beach, Virginia; Austin, Texas; Provo, Utah; Daphne, Alabama; and Charleston, South Carolina. Those new locations will bring the service to a total of 30 markets nationwide, with the company saying more markets will be added this year.

The company will also double the number of store pickup locations in Dallas, Houston and Atlanta, where the service was already available. Walmart previously expanded the service in September, after testing it in a handful of markets.

"We've seen more and more customers using it across the country each week," Michael Bender, chief operating officer for Walmart global e-commerce, said in a blog post Wednesday.

The service, which comes at no additional cost, allows customers to make their grocery orders online, then pick up their items in a Walmart parking lot. It's one of many new efforts to make the chore of getting weekly groceries a little more convenient, with Google, Amazon, FreshDirect and Instacart all working to bring in new shoppers. Most of these services bring groceries straight to people's homes, but Walmart seems to be finding enough customers interested in swinging by its stores to keep its service going. The store pickup option is likely much more profitable for Walmart to offer, since the retailer doesn't have to hire drivers to deliver fresh produce and meats, and it can use its existing stores as pickup hubs.

Walmart, though, is struggling to keep up with some of its younger retail competitors, particularly Amazon, the dominant force in e-commerce. While Walmart continues to rake in far more revenue than Amazon, Walmart in February posted its first annual drop in revenue in the 45 years since its been a public company. Amazon's revenue continues to grow in the double digits.

To keep up, Walmart is working on delivery drones and an Amazon Prime-like delivery service, and is also expanding in e-commerce. For now, though, the company makes only a tiny fraction of its money online.