Walmart to Add 3,000 Drivers to Bolster InHome Delivery; Shares Rise

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American retailer Walmart Inc. (WMT) has decided to bolster its InHome Delivery service by adding 3,000 associate drivers in 2022. The service was started in 2019 and has found huge success with customers.

The service delivers groceries and products directly into customers’ homes, including placing items straight into their kitchen or garage refrigerator. Shares rose as much as 2.8% on the news and ended the day up 1.4% at $143.92 on January 5.

Expansion of InHome Delivery

Currently, Walmart provides the InHome Delivery service to 6 million U.S. households. With its success, the company targets to reach 30 million households by the end of 2022.

To aid this expansion, the retailer has decided to add 3,000 associate drivers to its workforce to reach the maximum number of customers. Moreover, the retailer has decided to make its delivery fleet all-electric by the end of the year.

The associate drivers will be paid $1.50 per hour higher than most of the roles at the store. The drivers will be trained through both in-person and online virtual sessions to equip them with the required skillset for smooth delivery.

They will also receive all rewards and benefits including medical, vision and dental insurance, 401(k) matching, paid leaves, free counseling, as well as a 100% paid tuition fee for a college degree.

The InHome Delivery service delivers the items directly into the kitchen or garage fridge of the customers by using a one-time access code to unlock the customer’s home door or garage.

Customers have access to the InHome app, which even shows video recording at every step of the delivery. Walmart charges a fee of $19.95 per month or $148 per year for the service.

Walmart aims to attain a zero-emissions logistics fleet by 2040, and to aid this the company has installed 1,396 EV charging stations across stores and clubs in 41 states.

Furthermore, the Walmart has partnered with General Motors Company’s (GM) EV unit BrightDrop to secure 5,000 electric vans in 2022 to be used for the InHome Delivery service.

Company Comments

Tom Ward, Senior Vice President of last-mile at Walmart U.S., said, “We’ve been operating InHome in select markets over the last two years and have found it is a perfect solution for customers who want to live their lives without worrying about making it to the store or being home to accept a delivery… Identifying ways to help our customers save time and money is our purpose, and nothing showcases that better than InHome delivery, which is why we’re excited to bring the convenience of InHome to even more customers in 2022.”

Analysts’ View

Yesterday, MKM Partners analyst William Kirk reiterated a Buy rating on the stock with a price target of $166, which implies 15.3% upside potential to current levels.

An entrance signage warning of no shopping bags for the second day in a row at a local Walmart store intrigued the analyst. Commenting on the same, Kirk said, “No bags could signal that demand is surprising to the upside. We have no reason to believe there was a supply-side shock for plastic bags. Instead, Walmart could be having a better winter than expected.”

“No bags means lost sales, and if extra bags were available in the immediate area, they would be procured before this was a problem. Seeing signs like this suggest demand moved very quickly in Walmart’s favor.” added the analyst.

Some of the Top Analysts have awarded the WMT stock a Strong Buy consensus rating based on 14 Buys and 3 Holds. The average Walmart price target of $172.53 implies 19.9% upside potential to current levels. Shares have gained 3.9% over the last six months.

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