Walmart Stock Falls as Amazon Expands Grocery Delivery Service

Walmart's stock dropped after Amazon expanded its U.S. grocery delivery service to all customers in over 3,500 cities. Amazon previously limited the service to Prime members. Walmart responded by expanding its employee discount to cover nearly all grocery purchases made in-store and online. The move is part of Walmart's strategy to compete with Amazon and maintain its market share.

Amazon's latest expansion of its grocery delivery service has sent shockwaves through the market, impacting shares of major competitors. The e-commerce giant announced on Wednesday that it is extending same-day grocery delivery to all customers, including perishable items like dairy, meat, and produce, in over 3,500 cities across the U.S. [1]

This move follows Amazon's previous announcement to build out its same-day and next-day delivery network in smaller towns and rural areas, aiming to reach 2,300 towns and cities by the end of 2025. Amazon is waiving the delivery fee for Prime members on orders over $25, with a $2.99 fee for smaller orders and $12.99 for non-Prime members. [1]

The news has significantly impacted the shares of competitors such as Instacart, DoorDash, Walmart, and others. Instacart's shares dropped by 12%, while DoorDash and Kroger saw their shares fall by 5% and 4% respectively. [1]

In response to Amazon's expansion, Walmart has announced an expansion of its employee discount program. The discount now covers nearly all grocery purchases made in-store and online, including milk, meat, and frozen food. This discount previously applied to fresh produce and most general merchandise items but was limited to other food during the holiday season. Walmart's Chief People Officer Donna Morris stated that the expansion takes effect immediately and will include 95% of regularly priced items across the store. [2]

Walmart's move is seen as a strategic response to Amazon's grocery delivery expansion. The company aims to boost its own business by motivating its employees to spend more at its stores and website and to attract and retain workers. Walmart's policy change comes as economists and companies closely watch the impact of rising tariffs on consumer spending. [2]

The market's reaction to these announcements underscores the intense competition in the grocery delivery sector. Amazon's aggressive expansion and Walmart's strategic response highlight the ongoing battle for market share and customer loyalty.

References:
[1] https://finance.yahoo.com/news/amazons-latest-prime-grocery-move-184330673.html
[2] https://www.cnbc.com/2025/08/13/walmart-expands-employee-discount-on-groceries.html