Walmart Sees Its Highest Growth in Food in 4 Years
Walmart continues to gain market share in grocery. Its latest quarterly earnings report revealed food categories were especially strong during Q3, with unit volumes growing by the highest level in four years.
According to data and tech company Numerator, Walmart has captured 21.2% of grocery market share over the past year. This far exceeds such grocery retailers as The Kroger Co., at 9.3%; Costco Wholesale, at 8.5%; Albertsons Cos., at 5.1%; and Publix Super Markets, at 4.2%
One of the reasons for this growth is Walmart’s budget-friendly prices. Inflation-weary consumers are spending their money where the best deals are, and lately that’s been at Walmart.
“Providing everyday low prices for our customers and members remains a priority, and we continue to lower prices in the U.S. across our assortment of national brands and private brands,” said John David Rainey, Walmart’s EVP, CFO during the company's earnings call. “During the quarter, we had price rollbacks on approximately 6,000 items across our assortment, including around 3,000 items in grocery.”
In categories like grocery, price obviously matters, but Rainey also points out that so does quality.
Walmart has been experiencing a large percentage of market share gains coming from higher-income customers for several quarters now. For its third quarter, households earning more than $100,000 made up 75% of share gains.
“And we see categories like gluten-free and dry grocery, or grass-fed beef, organic produce, where our share in pickup and delivery is much higher and the mix is higher than in store,” explained Rainey. “So, we can be a great opening price-point value in the store, and we can sell high quality, and we can deliver it the way that the customers want.”
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Customers definitely want digital-based options. In Q3, e-commerce sales at Walmart U.S. grew by 22%, led by store-fulfilled pickup and delivery. Store-fulfilled delivery increased by nearly 50% and surpassed the $2.5 billion monthly run rate. Walmart has now had 12 consecutive months of deliveries above $2 billion.
“We want to be a great price, and we want to be convenient, and we can do both at the same time,” noted Rainey. “The expansion and delivery catchments, the expansion with delivery density, and the hours of operations have helped us lower our costs, which enable us to serve customers more flexibly.”
He added: "We're pleased with how customers and members are responding to our strong value proposition."
Each week, approximately 255 million customers and members visit Walmart’s more than 10,500 stores and numerous e-commerce websites in 19 countries. With fiscal year 2024 revenue of $648 billion, the retailer employs approximately 2.1 million associates worldwide. Bentonville, Ark.-based Walmart U.S. is No. 1 on Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. PG also named Walmart one of its Retailers of the Century.
