retail news in context, analysis with attitude

Reuters reports that Walmart is saying that it "has no immediate plans to expand its U.S. online grocery delivery beyond a test in California because it is not yet convinced there is sufficient demand.

"We are not making any announcements about other markets for grocery delivery in the U.S. right now," Neil Ashe, the president and chief executive officer of Walmart Global eCommerce, told reporters on Thursday afternoon.

Walmart has been testing online grocery ordering and delivery in Northern California. The statement from Ashe comes as Amazon has begun rolling out its Amazon Fresh service - this week in Los Angeles, with San Francisco scheduled to see it later this year.

"We'll have to wait and see whether the customer wants it," Ashe said.

• The Los Angeles Times reports that a new report released by Democratic Congressional staffers suggests that "Walmart wages are so low they force many of its employees onto the public doles, creating a drag on taxpayers and the economy ... The report analyzes data from Wisconsin’s Medicaid program, estimating that a single 300-person, Wal-Mart Supercenter store in that state likely costs taxpayers at least $904,542 per year and could cost up to $1,744,590 per year, or roughly $5,815 per employee."

The report, an update of a 2004 study, uses Wisconsin data because it is believed to be the most up-to-date, and "released Medicaid enrollment by employer as of the fourth quarter of 2012.
Wal-Mart was first on the list with 3,216 employees enrolled in BadgerCare, the state’s Medicaid program.  Including the children and dependents of these employees, Wal-Mart accounts for 9,207.

"The report assumes that about a quarter of the store’s employees enroll in other taxpayer-funded programs, including Section 8 housing, National School Lunch programs, the Earned Income tax credit and others."

Walmart has rebutted the study, saying the conclusions are "flawed" and "vast generalizations."
KC's View:
First of all, I don't believe for a second that Walmart has no plans for expanding online shopping. I don't think they are ready yet, but I think the plans are in a drawer somewhere. It is all a matter of timing, and figuring out what Amazon is up to.

As for the wage issue, I'm sure this can be argued a number of ways. But I'm also reasonably sure that a company like Costco has a lot fewer people, as a matter of percentages, on any kind of public assistance than Walmart does. Different business model, to be sure, but Costco has made a decision about what kind of company it wants to be, as has Walmart.