Walmart doesn't have immediate plans to expand its subscription service because execs say they're focusing on 'quality' over quantity

  • Walmart launched its signature members-only subscription service in September 2020.
  • Walmart Plus has been described as a direct competitor to Amazon Prime.
  • In the company’s latest earnings call, executives said they’re in no rush with Walmart Plus.
  • See more stories on Insider’s business page.

Walmart Plus may be a direct answer to Amazon Prime. But Walmart isn’t yet ready to go full-throttle with its namesake subscription service.

While CFO Brett Biggs said on the company’s earnings call Tuesday that he is aware of the interest around Walmart Plus, especially the program’s potential for unlocking streaming services for Walmart. But Biggs said the company simply isn’t ready to do much more with the subscription service other than continue “growing” it.

“The number one driver of selling memberships is the grocery super center pickup and delivery,”  Biggs said in response to a question from UBS analyst Michael Lasser. “And as we said before, capacity is our issue there. As we said in February, our focus is on the quality of that experience, not the quantity.”

The retailer launched its members-only subscription service in September 2020. Walmart Plus offers a cheaper alternative to Amazon Prime, and provides subscribers with services like ordering and shipping perks.

Walmart US CEO John Furner explained that a number of supply chain fundamentals need to be put into place in order to allow Walmart Plus to grow, including establishing network-wide inventory-focused algorithms. He said that the company is working toward building a “great foundation” for the membership service.

“We are marketing the program and in long-term, it’ll be important to us, but we’ve got so many other things going on with stores improving in traffic and e-commerce growing and Marketplace and all that kind of stuff,” Biggs added. “We just don’t think that Walmart Plus should be the primary focus at the moment for us with all these other opportunities.”

Walmart posted strong first-quarter earnings, with $138.3 billion in total sales and 37%  growth in net e-commerce sales.

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