by Cara Rasch
December 20, 2024
Several key factors give Walmart a competitive advantage as the largest grocer in the US, according to new research from Packaged Facts.
Inflation has significantly affected consumer spending habits, forcing many to prioritize value and affordability. In Packaged Facts’ March 2024 survey, 57% of respondents reported being “very concerned” about rising food prices. The impact of inflation has presented both challenges and opportunities for retailers.
With its long-standing commitment to everyday low prices, Walmart’s earnings have surged in the grocery category by attracting price-conscious shoppers in droves. Walmart is by far the largest US retailer of food and beverages, with an estimated market share of 20.2% in 2024.
By understanding Walmart’s strategies, grocery retailers can identify areas where they can effectively compete and opportunities to differentiate themselves. Similarly, packaged food and beverage suppliers can better understand how their products can appeal to one of Walmart’s key competitive strategies.
Walmart's core strength lies in its ability to offer competitive prices across a wide range of products, including food. As inflation squeezes household budgets, consumers are increasingly turning to Walmart for essential grocery items. This focus on value has been a key driver of Walmart's success in the grocery market.
Walmart has invested heavily in expanding its e-commerce capabilities. The company's extensive network of stores, with 90% of the US population living within 10 miles of a location, further enhances accessibility and convenience for customers as grocery delivery has expanded. A Walmart+ membership is also a good value proposition for convenience-oriented customers since it gives users unlimited free grocery delivery.
While known for its everyday low prices, Walmart is also expanding its appeal to a wider range of customers. The introduction of premium private label brands such as bettergoods aims to attract more affluent shoppers seeking high-quality, specialty items. Simultaneously, initiatives like Walmart+ Assist, which offers discounted memberships to low-income households, demonstrate the company's commitment to serving diverse customer segments.
Walmart is leveraging technology to streamline operations and enhance the customer experience. Investments in automation, artificial intelligence, and virtual/augmented reality technologies are poised to improve efficiency, reduce costs, and create a more engaging shopping experience for customers.
Interested to learn more? The latest research on Walmart shoppers and Walmart’s sales trends and competitive strategies in the grocery market can be found in the December 2024 Packaged Facts report The Walmart Grocery Shopper: Consumer Insights and Competitive Strategies.
About the blogger: Cara Rasch is a food and beverage analyst for Packaged Facts. She studies consumer and industry trends in this space and has a B.A. in economics from Allegheny College.
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