There are many grocery store chains across America where you can go to stock your pantry and fill your refrigerator. However, one stands out from the rest, being ranked as the largest grocery store in the world – and so far ahead of other retailers that it’s in a league of its own. Have you guessed the type? Yes, it’s Walmart, a store where you can find fresh home-baked goods and a new flat-screen TV.
Although it is not technically classified as a supermarket or grocery store, but a big box retailer, in 2023, Walmart will earn 427 billion. By the way, the same year, Costco – the second largest – brought in an estimated 175 billion dollars from US consumers (through Costco). That is the difference of 248 billion dollars between the two biggest traders. If we only consider Walmart’s grocery sales, the retailer will bring in about $240 billion in 2023. It’s still a big difference between all sales from Costco and sales of groceries from Walmart. That said, Amazon has Walmart to beat in terms of revenue; however, Walmart’s online grocery market share has grown to 26.9% in 2024, while Amazon has declined to 18.5% (via Marketer).
With 4,606 Walmart locations across America, in January 2024, the retail giant’s President and CEO John Furner announced plans to build or upgrade more than 150 stores and renovate 650 more. Existing stores only increase Walmart’s hold over the grocery market by increasing consumer offerings and encouraging more spending.
Read more: Guide to Buying Salmon at the Grocery Store
How Walmart Affects Local Grocery Stores
Walmart storefront – Alexander Farnsworth/Getty Images
Walmart’s dominance of the grocery market is good for its overall profits, but some research has shown that the stores can harm the economy of small communities, often forcing smaller competitors and local farmers markets out of business. A 2012 study by Puget Sound Sage, a non-profit focused on public policy, found that Walmart stores could reduce local economic output by $13 million. In addition to this, the resulting change in grocery sales diverts $238 million from local retailers as consumers choose to shop at Walmart instead.
This phenomenon, known as the Walmart effect, is well documented. It’s based on the fact that, as a large corporation, Walmart has more purchasing power than a small local grocer, so it can negotiate prices and negotiate with vendors to keep prices low and drive more sales. Although this can benefit consumers, small businesses often cannot match these low prices; along with decreased sales from distracted customers, this may result in you being forced to close.
In 2019, the Institute for Local Self-Reliance released a report detailing how Walmart dominated grocery markets. It found that, out of 203 metropolitan and “micropolitan” areas in the US where the chain controls 50% or more of the grocery market, Walmart controls 70% or more of it in 38 of these regions. This high level of control, along with the fact that Walmart is often the go-to grocery store in the region after forcing others out of business, helped accelerate its growth, which currently shows no signs of slowing down.
Read the first article on Chowhound.