Walmart (WMT) Delivery Push Gains Momentum with Papa John’s Partnership

Walmart (WMT) has intensified its delivery services by partnering with Papa John's, enabling customers in select U.S. markets to order pizzas, sides, and desserts via the company's app and website. This service is set to debut this fall, expanding to thousands of Papa John's locations nationwide. Customers can order from the restaurant independently or alongside Walmart groceries and household items, with fulfillment handled by Walmart's delivery network.

This move aligns with Walmart's broader expansion into fast delivery, as the company reported a 24% increase in U.S. e-commerce sales in the latest quarter and a 48% growth in fast-delivery services for groceries and general merchandise. The partnership could bolster Walmart's position as a comprehensive consumer-delivery platform beyond just a retailer.

Incorporating restaurant meals provides customers with a reason to use Walmart's app and the chance to increase order sizes and frequency. Walmart's vast store network, already fulfilling 80% of its e-commerce orders, can serve as a last-mile fulfillment system for restaurant orders. Additionally, the deal expands Walmart's restaurant offerings, creating a more robust alternative to platforms like DoorDash and Uber Eats.

However, there are concerns about the potential complexity and low-margin nature of restaurant delivery without significantly impacting Walmart's earnings. The partnership also carries the risk of merely providing convenience rather than driving increased spending. The timing of the announcement is crucial, as Walmart's U.S. comparable sales growth stands at only 2.6%, its weakest performance in over six years, despite a 24% increase in e-commerce sales.

Investors will closely monitor whether restaurant delivery drives new customers, larger baskets, or higher shopping frequency. If Walmart succeeds in integrating restaurant orders with its existing grocery and general-merchandise deliveries, the partnership could serve as a significant growth lever. Nevertheless, execution and delivery economics remain the primary risks.

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