Walmart's Grocery Delivery Expansion Heats Up Price War Amid Inflation

Walmart stock slid after Amazon expanded its US grocery delivery service to all customers in over 3,500 cities, pressuring rivals' pricing and margins. Walmart countered by expanding its employee discount to cover nearly all grocery purchases in-store and online. The retailer has recently introduced a series of benefits, including higher store manager pay and new bonus opportunities for hourly staff.

Amazon's aggressive expansion of its same-day grocery delivery service has sent shockwaves through the retail industry, with Walmart's stock taking a significant hit. The e-commerce giant announced that it will offer same-day delivery of perishable items in over 2,300 cities by the end of 2025, more than doubling its current service area [1]. This move, which is free for Prime members on orders over $25, directly challenges Walmart's pricing and margins, particularly for its Walmart+ service.

In response to the increased competition, Walmart has expanded its employee discount program to cover nearly all grocery purchases, both in-store and online. The retailer, which is the largest private employer in the United States, has extended its 10% discount to include dairy, meat, and other food categories [2]. This move is part of a broader strategy to retain workers and improve employee satisfaction.

The expansion of Walmart's employee discount program comes amidst a series of benefits introduced by the retailer, including higher store manager pay and new bonus opportunities for hourly staff. These initiatives aim to attract and retain talent in a tight labor market.

Amazon's grocery expansion is part of its broader strategy to make grocery shopping simpler, faster, and more affordable for its customers. The company has invested heavily in this area, with plans to bring same-day and next-day delivery services to more than 4,000 rural US communities by the end of 2025 [1].

Meanwhile, Walmart's stock has been volatile in recent months, reflecting the company's efforts to navigate a challenging retail landscape. The retailer's latest moves suggest a commitment to maintaining its competitive edge in the face of growing competition from e-commerce giants like Amazon.

References:
[1] https://nypost.com/2025/08/13/business/amazon-to-expand-same-day-grocery-service-to-2300-cities-sinking-shares-of-rivals-walmart-instacart/
[2] https://www.reuters.com/business/walmart-broadens-10-staff-discount-include-most-grocery-products-wsj-reports-2025-08-13/