Walmart is getting into the doughnut delivery business.
CNBC reports that “the nation’s largest retailer announced this week it will first start delivering Dunkin’ products from its own stores, but will then expand the program over the next year to include most of the doughnut chain’s approximately 10,000 U.S. locations, most located outside Walmart stores entirely. This outside-the-store experiment builds upon the retailer’s similar delivery program with in-store Subway restaurants.
“Industry experts say this amounts to Walmart throwing down the gauntlet at rival food delivery services like Uber Eats and DoorDash. For its part, Walmart is billing it as a natural extension of what it is already doing.”
Walmart says that “the Dunkin’ deliveries will run through its new service called Walmart Restaurant Delivery, for which Subway was the first partner.” In its announcement, Walmart underlined its ambitions by referring to itself as a “rapidly emerging contender in the restaurant delivery business.”
KC’s View:
Be clear: This is definitely not about delivering doughnuts.
The CNBC analysis makes the point that Walmart is far more interested in using Dunkin’ as a vehicle to get people to its website more often, where it can try to sell them the basics that they ordinarily might buy at traditional bricks-and-mortar retailers or from Amazon. It just gives them another entry point into shoppers’ consciousness.
I would guess that it also will provide Walmart with two other advantages. One is some incremental revenue, which may not be enormous, but every dollar counts. The second, and probably more important, is shopper data that Walmart will be able to access and act on to connect with shoppers.
That said, it is unclear to me exactly how many Walmart-branded delivery vans there are on the road, able to make coffee-and-doughnut (and, presumably, sugary drinks that have nothing to do with doughnuts or coffee) deliveries in a timely manner, even though the company says it has made a major investment in this sector. It is true that Walmart has a store within 10 miles of 90 percent of Americans, but this is a very different business model with different logistical demands.
One other thing. While Marc Lore’s Wonder – designed to evolve into a food super app that will provide food delivery, restaurant-quality foods and meal kits – is expected to go public early next year, watching Walmart invest in these kind of initiatives suggests to me that it also might eye an acquisition of Wonder, or at least a significant investment in the company, at some point. After all, it has taken this route before – in 2016 it bought Lore’s Jet.com for $3.3 billion as a way of jump-starting its e-commerce business and competing more effectively with Amazon. I think most folks would argue that it largely was successful in this effort – though the competition persists. So why not try it again?
The post Walmart Takes Aim At Uber Eats and DoorDash With New Food Partner appeared first on MNB.
View Original Article
