Analyst: Walmart's Personal Shoppers Are A Key Advantage In Grocery Delivery

Walmart Inc WMT investors are looking for any edge they can find in fending off Amazon.com, Inc. AMZN, Target Corporation TGT and other grocery competitors. Walmart has at least one advantage over its rivals, according to KeyBanc Capital Markets. 

The Analyst

KeyBanc's Edward Yruma has an Overweight rating on Walmart with a $112 price target. The analyst has an Overweight on GrubHub Inc GRUB with a $115 price target. 

Delivery With DoorDash

KeyBanc's Edward Yruma projects that Walmart will aggressively expand its $9.95 grocery delivery service in 2018.

With grocery delivery expected to be available in more than 2,000 Walmart stores by the end of the year, the retailer is clearly establishing a first-mover advantage, the analyst said in a Tuesday note. 

Walmart’s recently announced partnership with DoorDash is an indication that the company intends to aggressively press the advantage and gain as much initial market share of the grocery delivery business as possible, Yruma said. 

The DoorDash partnership is the type of solution the company is seeking until it can establish its own in-house delivery service, he said. 

“This announcement follows the company’s announcement of a partnership with Postmates on April 10 in Charlotte; we expect both services to expand markets with Walmart and would expect to see a Walmart-owned delivery solution as well in time."

The Personal Shopper Advantage 

While Walmart may not have its own employees doing the deliveries, Yruma said having Walmart employees selecting the products is a major advantage.

“Importantly, we believe Walmart’s dedicated staff (18,000 personal shoppers) gives the company a meaningful advantage over competitors (Amazon PrimeNow, Target-Shipt) that rely more heavily on non-store staff to pick."

The Walmart-DoorDash partnership is good news for GrubHub, as it will shift DoorDash’s focus away from going after GrubHub’s business, Yruma said. 

Related Links:

Amazon Moving Retail Wars To An Unexpected Battleground: Physical Stores

Morgan Stanley: Walmart's Slowing E-Commerce Growth Is Cause For Concern 

Photo courtesy of Walmart.