Most grocery shoppers know that Walmart’s everyday prices beat the competition more often than not, but that you can often save more at the grocery store when you use coupons and wait for a sale.
But how much can you save, exactly? And how can your local grocery store use that information to convince more people to shop there instead of at Walmart?
A new report from grocery eCommerce company Mercatus and the grocery consulting firm Brick Meets Click examines Walmart’s grocery dominance, among online shoppers in particular, and offers suggestions on how regional grocery chains can compete – and how you can save in the process.
“The research reveals that regional grocers face a tougher fight online against low-price market leaders like Walmart, who enjoy significant advantages in terms of price, service fees, and retail media revenues,” the report states.
The report compared the total price of 40 common grocery products purchased online from ALDI, Costco, H-E-B, Kroger, the Albertsons-owned chains Market Street and Tom Thumb, Target and Walmart. Walmart came out the winner – but its nearest competitor was awfully close. The total cost of the typical grocery shop at Walmart was $157. At ALDI, it was $158. The totals got progressively higher at the other retailers, topping out at $190 at Market Street, 21% higher than Walmart.
And that was after taking promotions, coupons and loyalty discounts into account.
So case closed, right? Even when you take advantage of all of the savings available, Walmart is still cheaper.
But there are telling details in Mercatus’s findings. Even though they were more expensive than Walmart in the final analysis, Kroger, Market Street and Tom Thumb offered the greatest overall savings as compared to their list prices. While Market Street was the most expensive overall, taking advantage of promotions and coupons could knock 10% off the overall price.
That doesn’t do much good when that final price is still higher than Walmart. But it does suggest that if you purposely shop the sales, use coupons and wait until the items you want are at their lowest price, you can save a lot more – even more than you can by shopping at Walmart.
“Regional grocers’ customers typically expect to find different ways to save money than customers who shop at EDLP (everyday low-priced) rivals,” the report points out. So it suggests that Walmart’s rivals highlight the ways they can save you money, not only with promotions, but when it comes to the costs specifically associated with online shopping.
“Grocers should consider reorienting their fee structure to help customers save more money and realigning activities to lower costs in smarter ways,” the report goes on. Retailers should ensure they offer a free pickup option, or discounts for people willing to wait longer for delivery, or lower prices when they handle online orders in-house as compared to competitors who use third-party services like Instacart.
And then they should “highlight the various savings that customers accrue – especially during the checkout stage,” the report advises. “This serves as an explicit reminder on how customers saved money when shopping at a regional grocer.”
Ultimately, it’s convenience and not price that is the strong point among Walmart’s rivals. In a survey of shoppers, only 42% said they choose to shop at a traditional grocery store because of its low prices, as compared to 72% who said the same about a big-box store like Walmart, or the 80% who said so about a hard discounter like ALDI. Among deal-seekers, though, those preferences are reversed – only 23% go to a hard discounter because of the many ways it offers to save extra money, 29% said the same about big-box stores, and 41% go to traditional grocery stores to take advantage of the deals. 40% of all online grocery shoppers said they look over the weekly sales circular before placing an order – and Walmart doesn’t even have a weekly sales circular.
“Regional grocers are well positioned to help their customers save time, and they can also offer customers additional ways to save money based on how they want to shop,” Brick Meets Click partner David Bishop said in a statement. “Strategies like having lower prices compared to third-party marketplaces, price protecting ad items, offering digital coupons and offering graduated fees based on pickup times are all ways grocers can help their customers save money when shopping online.”
So grocery stores need to step it up to compete with Walmart, the report concludes. And grocery shoppers need to step it up when it comes to seeking out the best sales, coupons and discounts to make sure they’re not overpaying at their local grocery store. Walmart may be the low-price leader – but if you, and your neighborhood grocery store, do it right, there may just turn out to be a new winner in the grocery price wars.
Image source: Virginia Retail 
