Walmart Rolls Back Shipping Fees as It Takes on Amazon

Walmart is rolling back shipping fees, offering free shipping for orders of any size for customers who pay an annual Walmart+ membership fee, taking on Amazon.
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Big-box retail giant Walmart  (WMT) - Get Report on Wednesday said it will roll out free shipping for orders of any size for customers who pay a $98-a-year membership fee, its latest move to take on rival Amazon.com  (AMZN) - Get Report and its popular Amazon Prime program.

Walmart said it was doing away with a previous requirement that orders amount to at least $35 to qualify for free shipping. Walmart+ members will receive free next-day and two-day shipping on non-perishable items, no matter the tally, according to Walmart.

The offer comes two months after the Bentonville, Arkansas chain launched Walmart+, its own bid to compete with Amazon's Prime membership program, which costs $12.99 a month and has more than 150 million members.

The move builds on Walmart’s pledge to continue adding benefits to its membership program, which also includes unlimited free grocery deliveries and fuel discounts. However, delivery directly from Walmart's brick-and-mortar stores on basic items like fresh groceries will still carry a $35 minimum and can come as soon as the same day.

Walmart’s online sales have soared through the pandemic as people have shifted to ordering groceries and other items online and either picking them up at the store or having them delivered. But the world’s biggest retailer is still a distant second online to Amazon.

Launched in 2005, Prime adds up to $119 a year and includes not only free and faster shipping but other perks including discounts at Amazon’s Whole Foods supermarkets as well as access to Amazon’s Prime movies and entertainment channel.

Still, Walmart is intent on delivering and profiting in the e-commerce space. While the retailer hasn't disclosed numbers behind its Walmart+ offering, including how many subscribers have signed up to date, it has disclosed heavy investments in its e-commerce operations, which include the Walmart+ program.

Shares of Walmart were down 0.83% at $151.40 in trading on Wednesday. Shares of Amazon was down 0.69% at $3,197.75.