Walmart and Amazon battle for online grocery market

In the battle to win the grocery wars, Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT) have been testing out different pricing strategies. Walmart already has more than 25 percent of the grocery market, according to a 360pi study that compared the shopping baskets of Amazon versus shoppers.

The study looked at a typical, 75-item grocery shopping basket, containing food, personal care items and cleaning supplies.

Over the course of two months, the difference maintained between the two retailers was initially a very narrow gap. Walmart's average price dipped slightly below Amazon in the middle of April, but in the beginning of May, the grocery basket at Walmart was consistently 4 to 6 percent higher than Amazon's.

The price volatility—the difference between the highest and the lowest prices of each basket—for Amazon was insignificant over the observed period, with only a 2 to 3 percent swing in the grocery and non-grocery basket averages. However, Walmart's average price on both baskets fluctuated more dramatically, with a 10 percent and 9 percent swing on grocery and non-grocery baskets, respectively.

Specifically looking at grocery, Amazon and Walmart had 2 percent and 10 percent swings on basket prices.

Walmart stands to grab a larger portion of the online market, as it recently introduced a subscription service, similar to Amazon's Prime, that offers unlimited free shipping to members. Simultaneously, Amazon started offering free, same-day delivery to Prime members.

For more:
-See this 360pi study

Related stories:
Walmart 'steps-up' Neighborhood Market
Amazon adding merchant items to Prime
Amazon makes same-day delivery free
Amazon Fresh now delivering in parts of New Jersey
Amazon, Manhattan eateries partner for one-hour delivery


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