Amazon Counters Walmart’s Grocery Lead With Third-Party Delivery Play

As Amazon looks to shrink Walmart’s lead in food, the eCommerce giant is expanding its presence in third-party grocery delivery.

Consumers in the Seattle area can now order same-day grocery delivery from local merchant Metropolitan Market on Amazon’s marketplace, Chain Store Age reported. Additionally, the online marketplace is also expanding its existing grocery delivery partnership with Weis Markets to six additional locations.

“By teaming up with well-loved grocers like Metropolitan Market, we’re offering our customers in the greater Seattle area even more selection, value and convenience as they shop for their favorite foods online,” said Christian Seitel, Amazon’s head of U.S. grocery partnerships, per the report. “We look forward to expanding our two-hour delivery window offering to more Metropolitan Market and Weis Markets locations in the future.”

The eCommerce company’s partnership with Weis Markets kicked off last November in addition to similar deals with other grocery merchants. Plus, Amazon had already been offering third-party same-day grocery delivery options in the United Kingdom before that.

The move comes as Amazon looks to grow its presence in grocery — the one retail category in which it trails behind competitor Walmart by a wide margin. The most recent edition of PYMNTS Intelligence’s Whole Paycheck Report, “Walmart Holds Grocery Lead Over Amazon Despite Overall Share Declines,” estimated the two companies’ market shares in various retail categories using years of their earnings reports in conjunction with national data from the U.S. Census Bureau and Bureau of Economic Analysis. The results revealed that as of the second quarter, Walmart captured a share of consumer grocery spending seven times the size of Amazon’s, at 20% and 2.7%, respectively.

As Amazon ramps up its efforts to close the gap with Walmart in the grocery sector, its expanded third-party delivery partnerships with popular local merchants such as Metropolitan Market and Weis Markets mark a step toward growing its presence in the category. Capitalizing on these grocers’ existing followings, the marketplace could gain more market share.

Walmart, too, is focused on growing its grocery business. The report revealed that the retail giant’s share has been inching upward in recent years. Now, the company is relying on its low grocery prices, difficult for rivals to compete with, to draw consumers into its stores and get them to spend on food. The retailer shared on its most recent earnings call how it is using price reductions to drive engagement.

“Walmart U.S. food prices were slightly inflated as we exit Q2, but down 30 basis points versus Q1,” CEO Doug McMillon said. “In Walmart U.S., we have more than 7,200 rollbacks across categories. Customers from all income levels are looking for value, and we have it.”

These rollbacks come as PYMNTS Intelligence research found that consumers across generations are highly price-motivated when choosing where to shop. A survey of more than 3,600 United States consumers for the Generation Zillennial report revealed that Generation Z individuals and millennials are roughly twice as likely to choose retail merchants based on price than brand loyalty. Plus, Generation X consumers and baby boomers and seniors are roughly three times as likely to do so.