Walmart drops online grocery pickup fee

Walmart Canada is cancelling the $2.97 fee it charges shoppers who order groceries online for pickup at participating stores.

The retail giant has charged a fee since it introduced the grocery pickup service in Ottawa in 2015. The service has since expanded to stores in the Greater Toronto Area (GTA), Calgary and Edmonton.

Orders are picked in store by dedicated Walmart staff, then brought to customers waiting in designated spaces in the store’s parking lot or at Penguin Pick-Up locations.

"Eliminating this fee is in keeping with our goal is to save customers money,"said Daryl Porter, vice-president omnichannel operations and online grocery, Walmart Canada. "While it only represents a fraction of a typical grocery order, we don't believe customers should have to pay even a penny more than necessary when they shop with us."

Grocery has been a key area of growth for Walmart as it tries to steal market share from the country’s largest food retailers.

Earlier this year the discount retail giant introduced grocery delivery within select regions of the GTA. The delivery service comes with a $10 fee and requires a minimum $50 order, and “all fresh groceries come with a 100% satisfaction, money back guarantee.”

Michael von Massow, an associate professor in food economics at the University of Guelph, said Canadians lag behind Americans when it comes to using online grocery pickup services, though they are catching up and it is a market with potential to grow.

He said key for retailers including Walmart is locking in first-time consumers because research shows they are unlikely to switch once they become accustomed to ordering online.

"If you can get their first order, you're more likely to get their second order," he said.

He said he didn't believe Walmart's decision would hurt its bottom line, adding that the increased number of orders from new and existing customers will likely more than make up for any losses.