updated 4/24/2011 3:25:44 PM ET 2011-04-24T19:25:44

Wal-Mart is testing home grocery delivery in San Jose, California, as the world's largest retailer ratchets up competition with online retailer Amazon.com.

With the new "Walmart To Go," customers can order up groceries, health and beauty products such as soap, shampoo and over-the-counter medicines, and household supplies like paper towels and laundry detergent from the company's website. Wal-Mart will then drive the goods over to customers' homes at their time of choice.

Wal-Mart Stores Inc. said Saturday that the San Jose launch is a limited test only. It didn't provide details on other possible test markets.

Wal-Mart is facing increasing price competition from dollar chains and online retailers. Customer traffic has weakened and Wal-Mart is trying to wrestle more market share away from Amazon.com Inc. That web retailer launched its U.S. grocery delivery service in 2007 and has since expanded to Germany and Britain.

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