Dive Brief:

• Walmart announced it’s giving $9.95 to shoppers who sign up for its Walmart+ membership platform on Monday, according to an emailed announcement — an overt dig at Whole Foods’ $9.95 delivery service fee, which went into effect nationwide on the same day.
• “Really? Who charges members a Whole new $9.95 fee to get their groceries delivered?” Walmart tweeted from its corporate account.
• The playful bit of gamesmanship indicates retailers are trying to capitalize on consumer grumbling over Whole Foods’ newly minted delivery fee.

Dive Insight:

On the one hand, it’s a bit odd to see Walmart taking aim at Whole Foods, considering the very different consumer segments the retailers cater to. One is a leading discount retailer known for its everyday low prices, while the other is a specialty grocer that embraces its premium image.   

On the other hand, the prodding by Walmart seems to show the company’s continuing drive to move upmarket and court those Whole Foods shoppers who might feel stung by the company’s new delivery fee. 

There are plenty of them, judging by the social media outcry since it was announced. Although Whole Foods opted for transparency at the time, noting its fee reflected higher fulfillment and technology costs that come with online shopping, customers said they were dismayed an Amazon-owned retailer could implement a $10 fee in place of what had, up until that point, been a free service for Prime members.

Really? Who charges members a Whole new $9.95 fee to get their groceries delivered? Today only, join Walmart+, a membership with #ZERODeliveryFees, & get $9.95 back on your next order. https://t.co/r7M4LMkQgA

— Walmart (@Walmart) October 25, 2021

Whole Foods’ position reflects the uncomfortable reality of higher operational costs grocers face in e-commerce. It also presents a promotional opportunity — one that Walmart is eagerly capitalizing on. The discount retailer has for years been courting increasingly affluent customers with offerings ranging from organic products to a personal shopping service it piloted. Walmart+ aims to secure a greater share of shoppers’ wallets by bundling an array of services, including reduced fees for online shopping.

Walmart+ offers perks like free shipping, prescription discounts and fuel savings in return for $98 a year or a $12.95 monthly fee. According to an analysis from Morgan Stanley cited by the financial news site Seeking Alpha, Walmart+ has gained between 10 million and 14 million members since it rolled out in September 2020.

Walmart is pushing the membership program ahead of the busy holiday shopping season. Last week, the company announced it will be extending its delivery hours and adding delivery windows in addition to offering alcohol for online ordering at more stores.