Across America, countless grocery store chains offer you the chance to restock your pantry and fill up your fridge. Yet, one chain distinctly rises above the rest, claiming its spot as the largest in the nation. It’s so far ahead, it almost feels like it’s playing in its own league.
Have you guessed the brand yet? You got it—it’s Walmart, the place where you can grab freshly baked goods prepared in-house and perhaps even snag a new flat-screen TV. Although not officially classified as a supermarket or grocery store, but rather a big-box retailer, Walmart’s financial achievements are nothing short of remarkable.
From baked goods to TVs: This store has it all and reigns America
In 2023 alone, Walmart generated approximately $421.8 billion from the American market and an impressive $611.3 billion globally, according to the company’s financial factbook.
To put this in perspective, that same year, Costco—the second biggest earner—amassed around $173.5 billion from U.S. customers. This marks a staggering $248.3 billion gap between these two retail giants.
Even when narrowing the focus to only Walmart’s grocery sales, the numbers are still staggering. In 2023, Walmart’s grocery sector alone brought in over $240 billion. This figure stands as a colossal difference when compared to the total sales from Costco, highlighting the dominant position Walmart holds even within the grocery realm.
- Despite Walmart’s astonishing revenue, Amazon technically surpasses it in terms of net income.
- However, Walmart’s prowess in the online grocery market can’t be overlooked. Its market share has surged to about 26.9% in 2024.
- In contrast, Amazon’s share in the same market has dipped to 18.5%, according to eMarketer.
How this gigantic retailer beats others in grocery sales
Walmart’s ability to adapt and thrive in both physical and online markets ensures its continued leadership and influence in the retail industry.
With 4,606 Walmart locations spread across America, the retail giant is gearing up for an exciting transformation. In January 2024, Walmart’s President and CEO, John Furner, unveiled ambitious plans to either build or upgrade over 150 stores while remodeling an additional 650.
This initiative not only promises to create more jobs but also aims to strengthen Walmart’s grip on the grocery market. By expanding its offerings and updating current stores, Walmart is set to entice more customers to spend, enhancing its already significant presence.
Walmart’s dominance in the grocery sector is a boon for its profits, yet it presents challenges for smaller communities. Research highlights that Walmart’s expansion can have adverse effects on local economies.
The key to dominating America’s retail scene
A notable analysis conducted in 2012 by the non-profit Puget Sound Sage, which focuses on public policy, discovered that the presence of Walmart stores could reduce a community’s economic output by approximately $13.7 million. Furthermore, this shift redirects around $25.38 million in grocery sales from local retailers as customers opt for the convenience and pricing of Walmart.
The phenomenon known as the Walmart Effect has been extensively documented and continues to shape the retail landscape. This effect stems from Walmart’s immense buying power, which far exceeds that of small local grocers. As a major corporation, Walmart can negotiate prices and deals with suppliers to maintain low prices, driving its sales upward.
While this strategy undoubtedly benefits customers with lower costs, it poses significant challenges for small businesses. Unable to match Walmart’s low prices and grappling with a shrinking customer base, many small retailers find themselves on the brink of closing their doors.
The Impact of Walmart on Local Markets
In 2019, the Institute for Local Self-Reliance published a revealing report on how Walmart has effectively monopolized local grocery markets. The findings were striking: in 203 metropolitan and micropolitan areas across the U.S., Walmart holds control over 50% or more of the grocery market.
More astonishingly, in 38 of these regions, Walmart’s control extends to an overwhelming 70% or more. This dominant presence frequently transforms Walmart into the primary grocery store in these areas, often after it has driven competitors out of business. This aggressive market strategy has accelerated Walmart’s growth, with no indication of this trend slowing down.
The Walmart Effect is a complex phenomenon with both positive and negative implications. While customers enjoy lower prices, the sustainability of small businesses remains a pressing concern.