Walmart put restaurant orders onto its Express Delivery network for the first time, starting with the Subway locations inside its stores and feeding its own last mile the kind of order it usually leaves to a third party.
How it works: Shoppers in six states (Connecticut, Florida, Georgia, Ohio, Pennsylvania, and Texas) can order a Subway meal in the Walmart app and get it in as little as 30 minutes, on its own or alongside a grocery order, with the program scaling to roughly 1,400 locations by the end of summer.
Subway has been a Walmart tenant since 2004 and is its largest in-store restaurant, which gives the rollout a footprint to scale into from day one.
Why it works: The prepared food rides routes Walmart's couriers already run, so the cost of standing up the network is sunk.
Adding orders to those routes spreads the fixed delivery cost over more drops, and a sub dropped into a grocery cart lifts the basket without adding a stop.
The economics depend on keeping the network full, and prepared food is dense, repeat, high-frequency volume, close to ideal density for an owned fleet.
Across the sector: The move puts Walmart on one side of a widening divide in last-mile strategy.
Kroger and Lowe's rent third-party delivery through DoorDash, keeping the cost variable and the network someone else's to run. Walmart, like Amazon and Wayfair, is investing in a network it owns and then finding more freight to push through it.
Owning the last mile only pays when it runs full, which is why steady volume like restaurant orders is the kind of freight that justifies the build.
Dig deeper:
The build-vs-rent last-mile decision - eMarketer [Explainer] - why last mile is ~53% of shipping cost.
