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Walmart bets on parcel stations for quick deliveries to propel holiday sales

Published 11/21/2023, 12:02 PM
Updated 11/21/2023, 01:27 PM
© Reuters. FILE PHOTO: FILE PHOTO: A Walmart worker organizes products for Christmas season at a Walmart store in Teterboro, New Jersey, U.S., October 26, 2016. REUTERS/Eduardo Munoz/File Photo/File Photo/File Photo
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(Reuters) -Retail bellwether Walmart (NYSE:WMT) on Tuesday said it would be adding parcel stations to its stores as it looks to cash in on demand for quick deliveries heading into the holiday shopping season.

The move comes ahead of the critical Cyber Week shopping period encompassing Thanksgiving, Black Friday on Nov. 24 and Cyber Monday on Nov. 27, where online spending is expected to touch $37.2 billion in the United States, according to data from Adobe (NASDAQ:ADBE) Analytics.

The company said in a blog post that it was targeting over 40 parcel stations by the end of this year, with many operating in time for the holiday season to execute next-day deliveries on online shopping.

Walmart's stab at expediting deliveries mirrors heavy investment from e-commerce giant Amazon (NASDAQ:AMZN)'s at its centers to provide quicker and cheaper deliveries and encourage more frequent and bigger orders from customers.

"Walmart has the infrastructure and the balance sheet to be able to do these types of things that many retailers can't," said Telsey Advisory Group analyst Joseph Feldman.

However, inflation-weary consumers, looking to stretch their holiday dollars, are skeptical about paying extra for quick shipping this shopping season.

© Reuters. FILE PHOTO: FILE PHOTO: A Walmart worker organizes products for Christmas season at a Walmart store in Teterboro, New Jersey, U.S., October 26, 2016. REUTERS/Eduardo Munoz/File Photo/File Photo/File Photo

According to a survey by Adobe Analytics, 61% of consumers said they were not willing to pay for faster shipping, opting instead for curbside pick-up, even for last-minute purchases right before Christmas Eve.

Both Walmart and Amazon sounded caution on holiday spending this year, as sticky inflation dims consumer sentiment on discretionary spend.

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