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Walmart's Sam's Club Enhances Delivery With Curbside Pickup

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The coronavirus-led increased social distancing has caused many retailers to alter their methods and facilitate more contact-less, convenient and safe shopping procedures. Offering curbside pickup is a measure, which is being adopted by several retailers, including Walmart Inc. (WMT - Free Report) , whose Sam’s Club division launched this service across the country.

Incidentally, Sam’s Club informed that its curbside pickup, which offers contact-less order online and deliver to car service, can be availed for free by its Plus-level members. These members also enjoy other benefits like free shipping on most orders, early shopping hours and 2% cashback on certain in-club and pickup purchases, among others. However, the curbside pickup service will be made temporarily available to all members (including Non-Plus), given the need of the hour.

Sam’s Club, which has been testing curbside pickup at 16 clubs, expects the service to be rolled out to all clubs by June-end. The company has been seeing favorable responses for this service and is speeding up the rollout to extend it to all 597 clubs. Markedly, members of Sam’s Club have already been benefiting from its focus on bringing innovation to shopping methods and its tech-friendly initiatives like Scan & Go and in-club pickup and others. The launch of a service like curbside pickup amid the pandemic is likely to enhance Sam’s Club’s performance.

We note that this division, which comprises membership warehouse clubs, witnessed a net sales rise of 9.6% to $15.2 billion in the first quarter of fiscal 2021. Sam’s Club comps, excluding fuel, grew 12%. While transactions grew 11.9%, ticket climbed marginally by 0.1%. E-commerce fueled comps by 170 bps. Markedly, e-commerce sales jumped 40% at Sam’s Club. Segment operating income came in at $0.5 billion, up 9.5% year over year.

Though coronavirus has led to increased social distancing, shopping for essentials is necessary. With increased stay-at-home trends, the role of online delivery services, like curbside pickup, has become even more important. Apart from Walmart, several other retailers like Target (TGT - Free Report) , Five Below (FIVE - Free Report) and Best Buy (BBY - Free Report) offer this service, which is vital amid the current situation.

Meanwhile, Walmart has long been augmenting its delivery game, which has further enhanced in the wake of the COVID-19 crisis. The company said that it has improved its delivery and pickup services, launched pickup in China, expanded online grocery capacity in the U.K. and introduced contact-less delivery in Canada, among others. Further, the company expanded its ship-from-store option temporarily to about 2,500 stores and extended curbside pharmacy pickup as well as mail-to-home options in the United States. Apart from this, the company announced a partnership between Uber and Flipkart for the delivery of daily essentials. Also, Walmart unveiled Express Delivery during the first quarter of fiscal 2021 at several stores, to deliver orders to customers in less than two hours.

Such efforts are helping Walmart cater to the burgeoning demand stemming from the pandemic-led stockpiling. In the last reported quarter, U.S. e-commerce sales surged 74% on strength in grocery pickup and delivery, walmart.com and the marketplace. Shares of this Zacks Rank #3 (Hold) company have gained 10.6% in a year compared with the industry’s growth of 12.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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