Walmart fights back against Amazon with one-day shipping in some US markets

Walmart’s one-day shipping marks the latest salvo in a fight between two retailers that have consistently tried to outdo each other. (Reuters)
Updated 14 May 2019

Walmart fights back against Amazon with one-day shipping in some US markets

  • The Walmart deal will be available to online shoppers in Phoenix and Las Vegas and then expand to Southern California in the coming days
  • The service will be rolled out gradually, with a plan to reach approximately 75 percent of the US population this year

WASHINGTON: Walmart is stepping up its battle with Amazon.com by offering one-day delivery without a shipping fee, weeks after Amazon announced a similar offer — a move that will intensify the race to deliver orders to shoppers faster.
On April 25, Amazon said it plans to deliver packages to members of its loyalty club Prime in just one day and expects to spend $800 million toward the shipping goal in the second quarter alone.
Walmart’s offer applies to fewer products. As many as 220,000 items, which are the most frequently purchased, ranging from laundry detergent to toys and electronics will qualify for one-day shipping. The orders have to be worth at least $35 to qualify.
The Walmart deal will be available to online shoppers in Phoenix and Las Vegas and then expand to Southern California in the coming days, the head of its US ecommerce service, Marc Lore, told Reuters in an interview.
The service will be rolled out gradually, with a plan to reach approximately 75 percent of the US population this year, which includes 40 of the top 50 US metro areas, Lore said.
One-day shipping marks the latest salvo in a fight between two retailers that have consistently tried to outdo each other in everything from online order delivery to grabbing a bigger share of the online grocery market. Walmart started offering same-day pickup in its stores in 2011 and caught up with Amazon’s two-day free shipping two years ago by offering it without a membership fee. It has made progress in closing the gap with its e-commerce rival by rolling out services such as curbside grocery pickup and same-day grocery delivery — options that have quickly become popular with shoppers.
Amazon, on the other hand, has hastened to reproduce the assets of brick-and-mortar rivals such as Walmart and has a mixed record with those projects. It is now racing to open shops with top-selling items ranging from books to cell phones; rolling out same-day curbside grocery pickup and gearing up to accept returns at all US Kohls Corp. department stores.
“We have been working on this since I have gotten here ... we have been building out the infrastructure for the last few years to support this,” said Lore, who joined the retailer in 2016 when it acquired his company, Jet.com.
The vast majority of the order volume for such a service comes from the “first couple of hundred thousand” products, he said.
The move will cost Walmart less as orders will be delivered from warehouses closer to the customer and arrive in a single box instead of multiple packages, Lore said.
“It is counter-intuitive... but the way we have structured our network, we will see improved profitability as a result of lower shipping cost,” he said.
Walmart sends out boxes from multiple warehouses around the country under its two-day shipping program, but with one-day shipping, it is stocking inventory in the closest single warehouse to the shopper, Lore said.


General Motors and workers union contract expires, increases risk of strike

Updated 41 min 4 sec ago

General Motors and workers union contract expires, increases risk of strike

  • Union officials told General Motors they would let the contract lapse just before midnight Saturday
  • A strike by 49,200 union workers would bring to a halt GM’s US production

DETROIT: The four-year contract between General Motors and the United Auto Workers has expired as negotiations on a new deal continue.
Union officials told GM they would let the contract lapse just before midnight Saturday, increasing the risk of a strike as early as Sunday night. Union members working Sunday were to report as scheduled.
But there was a wrinkle. About 850 UAW-represented janitors who work for Aramark, a separate company, went on strike Sunday after working under an extended contract since March of 2018, the union said.
The strike covered eight GM facilities in Ohio and Michigan. Although UAW workers at GM are supposed to work, it wasn’t clear early Sunday whether the rank-and-file would cross their own union’s picket lines. GM said in a statement that it has contingency plans for any disruptions from the Aramark strike.
UAW Vice President Terry Dittes said in a letter to members that, after months of bargaining, both the union and GM are far apart on issues such as wages, health care, temporary employees, job security and profit-sharing.
The union’s executive leaders and a larger group of plant-level officials will meet Sunday morning to decide the union’s next steps.
The letter to members and another one to GM were aimed at turning up the pressure on GM negotiators.
“While we are fighting for better wages, affordable quality health care, and job security, GM refuses to put hard working Americans ahead of their record profits,” Dittes, the union’s chief bargainer with GM, said in a statement Saturday night.
Kristin Dziczek, vice president of the Center for Automotive Research, an industry think tank, said the union could strike at GM after the contract expires.
“If they’re not extending the agreement, then that would leave them open to strike,” she said.
But GM, in a statement Saturday night, still held out hope for an agreement, saying it continues to work on solutions.
“We are prepared to negotiate around the clock because there are thousands of GM families and their communities — and many thousands more at our dealerships and suppliers — counting on us for their livelihood. Our goal remains on building a strong future for our employees and our business,” the GM statement said.
A strike by 49,200 union workers would bring to a halt GM’s US production, and would likely stop the company from making vehicles in Canada and Mexico as well. That would mean fewer vehicles for consumers to choose from on dealer lots, and it would make it impossible to build specially ordered cars and trucks.
The union’s executive board was to meet early Sunday to talk about the union’s next steps, followed by a meeting in Detroit of plant-level union leaders from all over the country. An announcement was scheduled for after the meetings end.
If there is a strike, it would be the union’s first since a two-day work stoppage at GM in 2007.
The move by the union also comes as it faces an internal struggle over a federal corruption investigation that has touched its president, Gary Jones. Some union members are calling for Jones to step down while the investigation continues. But Friday night, union leaders did not remove Jones.
Union officials surely will face questions about the expanding investigation that snared a top official on Thursday. Vance Pearson, head of a regional office based near St. Louis, was charged with corruption in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California. It’s the same region that Jones led before taking the union’s top office last year. Jones has not been charged.
On Friday, union leaders extended contracts with Ford and Fiat Chrysler indefinitely, but the pact with General Motors was still set to expire Saturday night.
The union has picked GM, which is more profitable than Ford and Fiat Chrysler, as the target company, meaning it’s the focus of bargaining and would be the first company to face a walkout. Picket line schedules already have been posted near the entrance to one local UAW office in Detroit.
Talks between the union and GM were tense from the start, largely because GM plans to close four US factories. The union has promised to fight the closures.