Walmart’s copycat strategy: Restaurant delivery is its latest use of heft to break into established markets

One of Walmart’s first attempts at branching out came in 1975 with the launch of the Sav-Co Home Improvement Center chain. The brand didn’t take off, and Walmart shifted its focus to adding new features to its stores.

While local hardware stores were common in this era, large-store formats were relatively uncommon. Home Depot didn’t open its first stores until 1979.

One of Walmart’s early in-store experiments was in the pharmacy business, which began in 1978 and has since grown into one of the company’s key business lines.

Walmart dispensed an estimated $36.8 billion in prescriptions last year, making it the fifth largest pharmacy in the US, according to the Drug Channels Institute, which tracks the pharmaceutical industry.

More recently, Walmart has stepped up prescription delivery speeds, with some orders filled in 30 minutes or less.

Walmart opened its first auto care center in Oklahoma in 1979 and the service has expanded to nearly 2,600 locations across the US.

Walmart’s auto centers have also served as a testing ground for the company’s expanding third-party marketplace, with customers able to order products like tires online that are shipped to a local store for scheduled installation.

The 80’s were a busy decade for Walmart and Sam Walton in terms of experimentation.

“’82, ’83 I think he opened four different formats in that two year period,” Furner said in June. “Sam’s Club came out of it and was really successful, and the others we decided not to go forward with.”

Walton’s approach to the wholesale club was modeled on Saul Price’s concepts FedMart and Price Club, the latter of which also inspired and eventually merged with Costco.

Sam’s Club now has more than 600 US locations with $90 billion in sales last year.

The Walmart supercenter is a quintessentially American phenomenon, but Walton famously modeled the concept off the European hypermarket format, which combined general merchandise retail with groceries under a single roof.

“It took probably five or six years until there was a store in Washington, Missouri, that worked,” Furner said of Walton’s attempts to adapt the hypermarket concept to the US.

It still took Walmart opening about a dozen more supercenters for the idea to really gain traction, he added.

There are now more than 3,500 supercenters and more than 650 neighborhood market grocery stores in the US. Walmart is the largest grocery chain in the country, pulling in roughly one in five dollars spent in the category, according to consumer analytics firm Numerator.

About a decade ago, Walmart embarked on a flurry of merger activity, snapping up specialty retailers Bonobos, Moosejaw, and Modcloth in a bid to expand the company’s reach with specialty brands and e-commerce customers.

All three chains remained independent of Walmart’s core operations and were subsequently sold off to other owners as the company refocused on its own offerings.

In 2019, Walmart brought its advertising business in-house with what would become Walmart Connect, which sells ad space for the company’s physical and digital properties.

Combined with a growing third-party e-commerce marketplace and the acquisition of TV-maker Vizio, Walmart’s ads business has delivered significant revenue growth in recent years.

Walmart’s latest bet puts the company on a course to compete more directly with food delivery apps like DoorDash and Uber Eats.

After letting grocery-delivery customers add meals from in-store Subway shops, Walmart said in September it would bring thousands of off-site Dunkin’ locations to the service.

Walmart has already established itself as a powerhouse in fast delivery for merchandise, groceries, and medicine — now it’s set to fulfill more of what other chains sell too.