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As Amazon Stops Taking Grocery Customers, Walmart Grocery App Hits Record

By Daniel B. Kline – Apr 15, 2020 at 9:27AM

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The brick-and-mortar chain seems unfazed by added demand.

Increased demand due to the coronavirus pandemic has forced Amazon.com (AMZN -3.01%) to stop taking new customers for its grocery delivery service. The retailer has also cut hours at some Whole Foods locations to allow store workers to focus on preparing delivery orders.

Amazon is placing new customers who want grocery delivery on a waiting list while it hires 75,000 more workers (on top of the 100,000 it has already added) to increase capacity. Walmart (WMT -2.50%), which offers grocery delivery and curbside pickup, may be the big winner of Amazon's inability to keep up.

A Walmart worker displays his vest.

Walmart has been adding workers to meet increased demand. Image source: Walmart.

Walmart Grocery for the win

The Walmart Grocery app has become the most-downloaded shopping app as of April 7, according to data from App Annie. The app "experienced a 460% growth in average daily downloads in comparison to its January 2020 performance," App Annie's Lexi Sydow wrote. "Similarly, Amazon also saw a 20% growth in average daily downloads compared to the same time frame." 

"While it's important to note that Amazon already has an incredibly high existing install base, this growth from Walmart Grocery shows that mobile is a key component to its brick-and-mortar and digital strategy for addressing accelerated consumer demands in response to the ongoing coronavirus pandemic," Sydow added.

A long-term win for Walmart?

It makes sense for Amazon to stop taking new customers so it can focus on keeping existing ones happy. That opens a door for Walmart. The brick-and-mortar chain has a chance to get people to download its grocery app, place an order, and input credit card info.

If those customers have a positive experience, they may become long-term customers. That's a big win that should carry over past the current pandemic.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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