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) doesnâ€™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 companyâ€™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 Comcastâ€™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, Walmartâ€™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 Amazonâ€™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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