Walmart To Launch Online Subscription Service For $98 Per Year- Report

Walmart Inc. (WMT) will be launching its own subscription service called “Walmart+” according to a report from Vox’s Recode on July 7.

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The retail chain will offer delivery on general merchandise, discounts on fuel at Walmart gas stations, early access to product deals, and same-day grocery delivery. The expected price will be $98 per year for the online subscription service.

In a press release on July 7, CEO and President Marc Lore alluded to some of the news by speaking only of the advancements in its InHome Delivery service by saying, “Customers can shop with us in stores, order online for free pickup, or have groceries delivered to their front doors.” He added, “We are on track to offer grocery pickup from 3,100 stores and same-day grocery delivery from 1,600 stores by year-end.”

Walmart’s stock was up 7% at market close on July 7 at $126.95 per share.

Last year, Walmart reported 37% growth in online sales and exceeded its own target of 35%. In its first fiscal quarter ending in April, the company saw its online sales surge beyond 74% largely due to the pandemic.

Walmart’s main competitor will be Amazon Prime (AMZN), which has over 150 million subscribers to its popular subscription service which goes for $119 per year. The online retail giant offers a range of delivery services such as free shipping and grocery store discounts on Whole Foods along with its popular streaming options and ubiquitous e-commerce platform.

Oppenheimer analyst Rupesh Parikh reacted positively to the news on June 7 saying, “We believe this could represent an attractive offering to combat any share shifts related to AMZN’s free grocery delivery offering.” He added, “WMT remains a top grocery pick, and we believe the recent underperformance creates an attractive entry point for investors.” He assigned a Buy rating to Walmart’s stock and set a price target of $145 suggesting 14% upside potential.

Baird analyst Peter Benedict was also optimistic referring to online grocery shopping as the “final frontier” in e-commerce. He also highlights Walmart’s large footprint of options in online purchasing, saying that it is uniquely positioned for this next phase. The analyst maintains a Buy rating and $140 price target (implying 10% upside) on the stock.

Walmart’s stock is up 7% year-to-date with a Strong Buy analyst consensus that breaks down into 19 Buy ratings versus 4 Hold ratings and no Sell ratings. The $138.11 average price target suggests 9% upside potential for the shares in the coming 12 months. (See Walmart’s stock analysis on TipRanks).