Wal-Mart Tests Online Grocery Delivery in California

Wal-Mart Stores Inc has begun testing an online grocery delivery service in San Jose, California, a company spokesman said on Saturday.

The world's biggest retailer had been rumored to be considering dipping its toe into online grocery delivery for the past few years.

The "Walmart To Go" test allows customers to visit Walmart.com to order groceries and consumables found in a Walmart store and have them delivered to their homes, the spokesman said.

Products include fresh produce, meat and seafood, frozen, bakery, baby, over-the-counter pharmacy, household supplies and health and beauty items.

No other details were immediately available.

The online grocery business has proven difficult to succeed in given the perishability of fresh food and the industry's small profit margins, analysts have said.

If WalMart decides to stay and expand in the online grocery delivery business, its competition would include Peapod and Amazon Fresh.

Walmart's U.S. grocery business generated about $140.6 billion in sales last year, up 2.1 percent from the previous year, according to a recent media report.

Groceries accounted for 54 percent of the company's total U.S. revenue in the year ended January 31, the company's fiscal 2011. The figures exclude Sam's Club stores.

(Reporting by Matthew Lewis; editing by Philip Barbara)