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Walmart’s faster delivery speeds are paying dividends—and helping generate profits—for the retail giant’s e-commerce operation.
At Walmart U.S., the number of deliveries made in less than three hours grew by 91 percent over the year prior, according to CEO Doug McMillon.
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Currently, Walmart offers store-fulfilled delivery to 93 percent of U.S. households. By the end of 2025, the Bentonville behemoth says it will be able to deliver to 95 percent of the population within this time frame, McMillon said in the company’s Thursday earnings call.
According to the company, roughly one-third of deliveries from more than 4,500 stores were expedited.
Walmart U.S. achieved e-commerce profitability in the first quarter, driving the company to its first overall online profit ever.
A lot of the profitability comes down to Walmart’s success in cutting delivery costs. While the company did not say how much delivery costs were slashed in the quarter, Walmart has previously touted year-over-year cuts between 15 percent and 40 percent since late 2023.
John David Rainey, chief financial officer and executive vice president at Walmart, said the cost cuts come down to two factors: densifying last-mile deliveries and collecting fees from customers who pay for faster delivery.
“We’re able to spread those deliveries over multiple households. Think about the opportunity to deliver a package to five houses on a street versus one house on a street,” said Rainey. “As we grow, we continue to spread those costs over more volume.”
Alongside the $9.95 standard delivery fee already applied to online shoppers, Walmart tacks on an extra $6 per order if they want it within three hours.
“What the team has done that I’ve been really impressed with is providing customers
flexibility to serve customers when they want to be served the way they want to be served,” said Walmart U.S. president and CEO John Furner. “A Walmart customer can shop at the counter, they can shop with curbside pickup, we have in-home delivery. Our first and third-party delivery options, including fulfillment services for our sellers, have been on a strong growth rate for the last few years.”
The company also ships packages directly from 29 dedicated e-commerce fulfillment centers.
E-commerce sales in the U.S. grew 21 percent on the double-digit growth within its store-fulfilled pickup and delivery options, as well as 31 percent growth in the Walmart Connect advertising business, continuing a consistent string of quarters seeing online growth reach 20 percent or more.