Walmart shares were soaring Tuesday on a report that the company late this month will introduce an Amazon Prime-style subscription service called Walmart+.
According to the technology news site Recode, the new service will cost $98 a year, and include same-day grocery delivery, fuel discounts at Walmart gas stations, and early access to product deals, among other features. Recode had originally reported on the program in February; at that time Walmart+ was supposed to roll out in March or April. But the launch was apparently delayed by the onset of the Covid-19 pandemic.
Not mentioned in the Recode story is that Walmart (ticker: WMT) already offers a $98-a-year grocery-delivery service called Delivery Unlimited that was introduced last September. Walmart+ would appear to be an expanded version of that program, with added features such as gas discounts.
Amazon.com (AMZN) doesn’t report the number of Prime members, but Recode puts the total at 150 million. Prime membership, which is $119 a year, includes free two-day shipping on many goods, same-day delivery on groceries and other products in some markets, access to a deep library of films and television shows, streaming music and discounts at the company’s Whole Foods grocery stores, among other things.
While it would be tempting to see this as a direct threat to Amazon, it seems unlikely to pose serious issues for the online behemoth or its investors. While the Walmart digital business has grown dramatically, the company has a mixed record of trying to compete with digital rivals. The company has made several failed forays into streaming video, for instance, and in April sold Vudu to Comcast’s (CMCSA) Fandango unit for an undisclosed amount.
Both Amazon and Walmart have seen surging demand during the Covid-spurred economic shutdown, but while Amazon shares have gained, Walmart’s shares have floundered, at least until Tuesday.
Neither Walmart nor Amazon immediately responded to a request for comment on the Recode story.
As of Monday, Walmart shares had gained exactly 5 cents year to date, while Amazon’s stock had soared 65%. On Tuesday, Walmart shares spiked 6.6% to $126.71, while Amazon shares were down 1.6% to $3,009.55, a day after crossing the $3,000 level for the first time and setting an all-time high.
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