How Walmart Is Beating Everyone In Groceries

Sky high grocery bills are inflicting pain at the supermarket checkout counter. Food-at-home prices in 2022 jumped 11.4% and are expected to increase 5% in 2023. By comparison prices rose just 0.7% in 2019.
In an effort to stretch their grocery dollars further a growing number of Americans are turning to Walmart. The Arkansas-based retailer is America’s largest grocer more than twice the size of its next biggest competitor. Known for its low prices and massive footprint Walmart takes in more than one in four grocery dollars in the U.S., a one and a half percent increase from 2021.

Walmart’s low prices are also resonating with high income consumers who made up about half of the company’s market share gains in food in the fiscal quarter that ended January 2023. But with inflation cooling and prices leveling off will Walmart be able to hang to its newly acquired shoppers?

Chapters:
00:00 — Introduction
02:44 — Walmart's grocery business
05:19 — How Walmart makes money
09:16 — Independent grocers

Produced by: Shawn Baldwin
Edited by: Dain Evans
Animations: Mithra Krishnan
Supervising Producer: Jeniece Pettitt

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How Walmart Is Beating Everyone In Groceries

[mw]

It's been very sad seeing the grocery prices double even at Walmart these past few years.

[SuperYova]

I buy anything that comes in a package from Walmart, then jump over to a local grocer for fresh food. This allows us to hit a sweet spot saving money and eating well. Formerly did all our shopping at Publix but the prices just can no longer be ignored.

[robertgrimm]

I've actually noticed the opposite. WM is getting higher on groceries then my local grocery store. While WM saves me on some things I've noticed that on groceries there is little difference and at times I end up paying more shopping at Walmart then I would if I shopped at my local grocery store.

[rmartin]

I stopped shopping at Walmart after I purchased a 24 pack of Ozarka water, a 6 pack of Dos Equis and a 6 pack of Modelo 2 months ago at the self checkout. The worker checked my ID and approved the purchase. I was then stopped by the worker at the podium at the front of the store who wanted me to see my receipt. She didn’t verbally ask, but began flailing her hands around. I showed it to her (again…just water & beer) and she proceeded to count every beer and every bottled water as if I was going to steal one by forcing it into the already shrink wrapped packaging. Fast forward, I now only shop at Kroger & Tom Thumb. (Plano, TX) BEST….DECISION….EVER!!!

[ajcab]

I tried grocery pickup first at Walmart but every time, something was wrong in my order and I was required to go to customer service inside where the line was always long and the desk staffed by 1 person.

I switched to Kroger and experienced the best customer service and never had a problem with getting my items. I may pay a little more at Kroger but I can take advantage of their coupons and fuel points. I’d rather pay a little bit more and save the time and energy.

[JAlexanderCurtis]

My best friend owns a local grocery store in a mid-size metropolitan area. There are a lot of products that Walmart actually sells cheaper in their stores than he can buy it from his own suppliers from. Milk in the video is a good example, it is about $1.50 less per gallon at walmart than his own suppliers will sell it to him at. Bananas are his top selling produce item and he buys them by the crate from walmart because they are 25¢ per pound less than he can buy them direct from Dole, for the same bananas. So he actually buys from Walmart and resells at his own store. His store targets more affluent shoppers and it was incredibly successful even up into the pandemic. But since 2021 sales have plummetted and he said a lot of his regulars have started buying more and more at walmart because of prices and only shop with him for a few specialty items or local items that only he has. So his average order size has dropped significantly meaning people are buying the bulk of their groceries at places like walmart. And this is from an almost exclusively affluent customer-base.

[rockyGonnaHurtYou]

Publix is the most expensive store in Florida. They tend to open shop around heavy senior citizen communities and they don't post their prices online.

[e.turduckeny]

I don't always find Walmart to be the cheapest. Other stores have bogo options, better sales or places like Aldi that are just plain cheaper on many items. It's also getting harder to find certain items at Walmart. Certain brands, varieties, flavors have disappeared as the isles have been taken over by whatever mega brand has bought the shelf space. I still get some things there, but it hasn't been a one stop shopping place for us in a long time. And it's typically much more stressful. Less associates, less registers and messier overall. I appreciate that they have grocery pick-up, but I've lost count of how many times the isles have been blocked or I've been bumped by those huge blue carts that associates are wheeling around to fill the pick-up orders. We're blessed to live in an area with more options (which I know not everyone is). We do a little Walmart, Publix, Aldi, Target and BJ's. We don't shop at them all every week, but pretty much keep an eye on the sales and buy when it's a good price stocking up a bit. Keeping an eye on the sales, coupons, fuel offers, etc takes a bit of time, but we save a lot. Competition is a good thing.

[eddieg]

The EXPERIENCE of going to any Wal-Mart is horrible. It’s an ugly store, full of sugary foods. I appreciate their recent additions of FRESH PRODUCE, but the stores (and many of their customers) are AWFUL. I’d HAPPILY pay more for a smaller, nicer, store (preferably FAMILY RUN) I choose to support LOCAL businesses.

[courtlaw]

I don't have no issues with Walmart but am worried about corporate consolidation and companies driving out competition.

[kp]

I live in CA. Walmart is cheaper on most products by a large margin. I shop there by necessity but it is a depressing experience. Nobody’s smiling, the store is dirty, they are often out of things and there is limited selection.

[Katalinmason]

I’m sorry for the smaller markets. I used to try to shop locally. But prices are too high, my soc. Sec. does not stretch far enough. Walmart is the only way we can still afford to eat a variety 😢of foods.

[torashuPanda]

Bad city planning also kills businesses, for example: mixed use suburbs. Small stores can survive there because if you can buy groceries with a 5 minutes walk you wouldn't mind paying a little more, but if you already have to drive why not go to the cheaper place.

[jaymanfly]

it seems like Walmart may have paid CNBC for this.

[Mustapha]

One factor, I think, is that Walmart essentially has no competition any longer. They hold all the leverage over suppliers.

I worked for a company that did merchandising in Walmart. This was several years ago. Walmart brought in representatives from the big beverage companies and demanded that they eat an increase in the cost of their products so Walmart could retain the same margin without raising their prices. One of the companies refused. By close of business the next day, Walmart had taken down all of the secondary displays of that company's products, leaving their only representation in the various coolers throughout the store or in the warm beverage home location. The beverage company bent the knee a mere couple of days later, after which their secondary locations were restored. Walmart could not get away with doing that if their retail segment had healthy competition.

[miniaddict]

Target is doing the opposite, they sell low quality items at high prices. I fail to see how they’re relevant these days.

[tnnsboy]

H-E-B is truly a force to be reckoned with. They excel in quality, surpassing Walmart's freshness. While slightly pricier, their regular deals and coupons make it unmatched in value.

[fredrezfield]

i like how selective they were when filming walmart shoppers

[viewerne]

Walmart may only be worth it if you shop in store.
If you opt for delivery even with their Walmart plus membership you always have to pay a tip to instacart.

The tip every time you order groceries ends up making your annual Walmart plus membership way more costly.

I found it was also difficult getting my stuff. It was like they couldn’t find delivery people (even though I always tipped).

Some orders had to be outright cancelled because I never received them. That’s when I decided to switch to an annual Kroger membership.

The Kroger deliveries don’t require tipping and your groceries are
kept cold in a refrigerated Kroger truck. Plus my groceries are delivered right on time like clockwork by actual Kroger employees.
Best decision I ever made.

[dskwaredu]

The reason I've mostly switched to Walmart is because of their own brand. For example, I can buy the Walmart brand flour tortillas for less than half the name brand. They look and taste exactly the same. Some Walmart products are very sub-par but some are every bit as good. Also, when I shop online, they often substitute a more expensive item than what I put in my cart. That's a good deal.