Meet Your New Grocer: Walmart

by Adam on November 30, 2012

When you think of large grocery stores, what comes to mind? Depending on where you live, perhaps it’s A&P (NY), Shaw’s (Boston) or Stop & Shop. If I asked which chain you thought would top the list as the largest grocer in the US, your answer would be…? Probably not Walmart. But indeed, the right answer is Walmart. It turns out that the big-box retailer has 15%+ marketshare in the grocery store market (see the below link, which is admittedly almost 2 years old, so the stat is likely even higher now):

While one wouldn’t initially associate the words “food” and “Walmart,” it turns out there’s a lot that the big box retailer has done to become a mainstream supplier in the food space. There are a number of factors that contributed to this incredible growth:

  • Focus on logistics and sales channel iteration, rather than selling a specific product. In fact, when Walmart first opened, it didn’t even sell groceries.
  • Tailor your product to specific markets, rather than taking a national approach that has no specific focus. Even though it’s a big chain, Walmart has introduced a number of personalized neighborhood stores that make their products more accessible.
  • Innovate your product line and pay attention to competitors. Walmart’s own Great Value brand launched in 1993, playing off products from higher priced competitors with generic brands.
  • Know your audience (and pay attention to pricing). As of the publication date of the article, Walmart was on average $3.02 lower in terms of price on a basket of specific items. Price may not be the only factor worth competing on, but it’s certainly one of them.

Now, it seems that Walmart is getting more deeply into another food-service space, with monthly subscription boxes for artisan products. I’m not sure if this is something that their audience really wants, though it is encouraging to see the chain trying to bring the “foodie perspective” to as large an audience as possible.

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