Walmart

(walmart.com)

Most investors think of Wal-Mart Stores (NYSE:WMT) as a massive and mature company that doesn't do much to increase its growth potential. These investors are only half right. While Wal-Mart is a massive and mature company, it still finds ways to grow -- or at least attempts to find ways to grow.

Currently, there are several different aspects to explore. However, in this case, we'll take a look at one of Wal-Mart's stealthier moves, which was to quietly purchase a small company that will potentially give it an edge over Amazon.com's (NASDAQ:AMZN) AmazonFresh in the food-delivery market.

Who are those guys?
Wal-Mart recently, and quietly, acquired Yumprint, which helps consumers discover new recipes from thousands of food blogs, plan meals, and calculate nutritional information. The website, which was founded in 2011, also has a mobile app, which leads to increased convenience.

To give you an idea of the rapid growth of Yumprint, take a look at its Alexa rankings. Alexa, which happens to be owned by Amazon, is the global leader in website analytics. In simpler terms, it determines what websites get the most traffic as well as which sites are growing or failing.

Yumprint.com Alexa ranking has improved 56,097 spots to 295,672 over the past three months. Also over the past three months, pageviews-per-user has increased 3% to 2.30, average time-on-site has increased 4% to 2:30, and the bounce rate (visitor views one page and leaves) has declined 18% to 45.6%. All these numbers are positive.

Yumprint was founded by Chris Crittenden and Wes Dwyer, former management consultant at McKinsey & Co. and former engineer for Microsoft, respectively. That sounds like a winning team. And that's part of the reason Wal-Mart made the acquisition.

The details of the deal haven't been disclosed, but we do know that the acquisition was made to help Wal-Mart's 'Walmart To Go' online delivery service. With Yumprint on board, Wal-Mart customers will now have an opportunity to form their shopping lists based on recipe finds. Additionally, Yumprint's technology will offer the following benefits: recipe semantics, how to better match ingredients to advertisements, nutritional information calculations, and consumer taste preferences.

This acquisition is in addition to OneOps (cloud computing start-up), Tasty Labs (putting the useful back into social software), Torbit (measures website speed), and Inkiru (combines predictive intelligence, data analytics, and a decision engine). All acquisitions have been made by @WalMartLabs

It's clear that Wal-Mart is looking to grow technologically, and that its most recent acquisition might give it an edge over AmazonFresh. But how do these two services compare to each other right now?

Getting fresh
Currently, Walmart To Go costs $5-$7 per delivery with a minimum order of $30. In-store pickup is available for free, but it's only available at 11 locations in the Denver area as of right now. 

AmazonFresh is available in Seattle, Los Angeles, and San Francisco. Unlike Walmart To Go, it comes with an annual fee of $299. In cities like Seattle, Los Angeles, and San Francisco, this might work, but such a hefty annual fee might limit AmazonFresh's potential in other geographical areas where consumers don't possess as much buying power. The one positive is that anyone who signs up will receive an Amazon Prime membership.

The biggest disadvantage for AmazonFresh is that in-store pickup isn't an option. By offering in-store pickup, Wal-Mart can guarantee more freshness, and it could lead to people shopping for other products in the store. 

Kroger's (NYSE:KR) Harris Teeter offers in-store pickup, which goes by the name of Express Online Shopping. You can select the time you want to pick up your food, which helps guarantee freshness. However, it's not free, coming with a cost of $4.95. 

If you're considering Kroger over Wal-Mart from an investing perspective, then you will have a difficult decision to make. While Wal-Mart has delivered top-line improvement of 18.05% over the past five years, Kroger has grown at a faster 31.18% over the same time frame. On the other hand, Wal-Mart has generated $23.26 billion in operating cash flow over the past year, much more significant than Kroger's $3.48 billion. Of course, Wal-Mart is a much larger company, but the fact is that this cash-flow generation will lead to more reinvestment opportunities. Furthermore, Wal-Mart currently offers a dividend yield of 2.60%, whereas Kroger yields just 1.60%. For the record, Amazon generated $5.48 billion in operating cash flow over the past year. 

Walmart To Go currently has an edge over both competitors in food delivery, which is an edge it needs. Amazon is a rapidly growing company, and this could present at least one opportunity for Wal-Mart to grow as quickly as Amazon in one area. 

Also, according to RetailNet, a basket of almost 30 items cost $94.80 in Los Angeles with AmazonFresh, compared to $80.38 with Walmart To Go. AmazonFresh is going after a higher-end shopper, which is somewhat surprising given the company's historical approach. Walmart, on the other hand, is targeting the masses. While reports indicate that AmazonFresh is appreciated by current customers, its approach of an annual fee and higher-priced items will limit its potential. Walmart should have more to gain. 

The Foolish takeaway
At the moment, Walmart To Go is just a small part of Wal-Mart's business; but if it takes off, it could become a significant growth driver in the future. There are many challenges in this business, especially when it comes to consistent profitability, but Wal-Mart is quietly setting itself up for success by acquiring smaller companies like Yumprint in order to increase its odds of success. Therefore, whenever you hear or read that Wal-Mart is going backwards, keep in mind its most recent initiatives as well as its past success at finding ways to win. Please do your own research prior to making any investment decisions.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.