The news
Walmart’s restaurant delivery has worked so far because the restaurants were inside its stores. Papa John’s, its third restaurant partner this year, is the first with no location in a Walmart, so the driver now makes a second stop for hot food before the grocery drop.
Walmart will deliver Papa John’s through its app and website in 30 minutes or less, starting in select markets this fall and expanding to thousands of locations. Papa John’s has roughly 3,000 US restaurants. Spark drivers, the independent contractors who handle Walmart’s online deliveries, carry the orders.
The move puts restaurant orders onto the same store-based fleet that carries groceries. Retailers that rent last-mile capacity from DoorDash, including Kroger and Lowe’s, now compete with a network that runs its own.
What changed
Subway, the first partner, has roughly 1,400 participating restaurants, all of them store tenants, so a Spark driver already at the store for a grocery order collects the food on the same stop.
Dunkin’ started with 150 in-store shops. Walmart plans to extend it over the next year to most of the chain’s roughly 10,000 US locations, nearly all of them outside Walmart stores.
Papa John’s joins with no in-store locations at all, after an 8.3% drop in same-store sales last quarter, Nation’s Restaurant News reported. The chain has used DoorDash since 2019 and sells through all the major apps.
Restaurant-only delivery costs a flat $5. Walmart does not mark up menu prices at its in-store restaurants.
How it works
Walmart runs every fast delivery out of its stores. Stores fulfilled 80% of its e-commerce orders and all of its fast deliveries last quarter. The same fleet already runs those grocery deliveries, so a restaurant order adds a stop to a route that was running anyway.
“Walmart doesn’t need a $6 Dunkin’ order to work on its own,” R.J. Hottovy, head of analytical research at Placer.ai, told CNBC. “It needs to attach that order to an existing $80 grocery basket.”
Inside the store, that attachment came free. “The Spark driver was already there staging a grocery order,” Mike Danford, chief strategy officer at e-commerce agency Adverio, told CNBC. “Once you leave your own building, the attachment breaks, and you’re essentially running pure delivery economics against DoorDash and Uber Eats.”
The precondition is the attach rate. Nearly 65% of restaurant orders since the Subway launch also included Walmart items, per Greg Cathey, Walmart’s senior vice president of e-commerce fulfillment. One in five Subway orders with Walmart items was a customer’s first Express Delivery order. Those numbers were earned with the restaurant in the building. Papa John’s will show whether they hold when the driver has to go somewhere else first.
Order frequency is the other reason. Groceries are a weekly purchase; coffee and pizza can be weekly or daily, which gives customers a reason to open the Walmart app more often, Danford said.
The competition
DoorDash handled 970 million orders in the second quarter, up 27%. Kroger has signed on to DashMart Fulfillment Services, which runs delivery out of DoorDash’s own warehouses. Amazon is expanding Amazon Now, its 30-minute service, to dozens more US cities by the end of 2026. Uber agreed this summer to buy Delivery Hero for $15 billion.
The counter
Hot food is harder to carry than groceries. Customers tolerate less delay on a meal, Amrita Bhasin, chief executive of supply-chain software company Sotira, told CNBC. A single off-peak order in a rural area can also send a driver on a route for one customer, she said.
The delivery window is unsettled. Walmart promised 30 minutes or less; Nation’s Restaurant News reported delivery in one to two hours through Express Delivery.
Walmart is adding these stops to a driver program that already has a legal record. It agreed earlier this year to a $100 million judgment with the Federal Trade Commission and 11 states over deceptive Spark earnings claims, and paid Texas another $13.3 million this summer.
What’s next
Papa John’s goes live in select markets in the coming weeks. Dunkin’ expands beyond the in-store shops over the next year. The test is the attach rate on an out-of-store partner. Walmart published the Subway figure; the Papa John’s figure will say whether the store-fleet economics survive the second stop.
