You can save money on your groceries by clipping digital coupons, or you can save money on your groceries by shopping at Walmart. But you can’t do both at the same time.
And given the choice, it appears more shoppers will opt for shopping at Walmart.
dunnhumby’s newest Consumer Trends Tracker finds that grocery shoppers are still looking for ways to save money, but they’re embracing different strategies for doing so.
The fastest-growing strategy involves using coupons. dunnhumby found that 47% of shoppers now redeem digital coupons or deals through a store’s loyalty program most or every time they shop, up 2.5% from a month earlier. Other growing strategies include buying in bulk, and shopping at stores “with abundant promotions.”
But these fastest-growing strategies are not the most popular. It appears that shopping at Walmart is.
Walmart’s customer penetration hit 72%, meaning that nearly three out of four shoppers did at least some of their shopping there during the survey period. It’s the highest penetration rate in the four-year history of the survey, up 6% from the same time the year before.
And Walmart’s competitors aren’t even close. Second place is Dollar General at 29%, which means three out of ten shoppers have shopped there. Close behind are ALDI, Target, Dollar Tree and Costco, followed by Kroger at 24%, the only traditional grocery chain to earn more than 10% of American grocery shoppers’ business.
Since Walmart doesn’t have a digital coupon program, these growing savings strategies appear to be at odds – more shoppers are using digital coupons, but more shoppers are also shopping at a place where they aren’t able to use digital coupons. Walmart does offer a digital coupon-like program in the form of Walmart Cash, in which manufacturer-funded digital offers give you cash back on future Walmart purchases, though it’s not quite the same as traditional loyalty program-based digital coupons.
What dunnhumby’s findings really indicate, then, is that more shoppers are doing both – clipping digital coupons at stores that offer them, and shopping at Walmart for their low base prices, and maybe taking advantage of some Walmart Cash deals while they’re there. Either way, saving money is most shoppers’ top priority, however they do it.
“We are seeing that U.S. households are realigning where they shop based on affordability,” Matt O’Grady, President of the Americas for dunnhumby, said in a statement. “What makes this different from the 2023 inflation spike is that consumer concern persists even as actual inflation moderates. The consumer is just not feeling it.”
And Walmart isn’t the only beneficiary of this price sensitivity. For the first time, dunnhumby found that the percentage of those who shop at mass market stores like Walmart and Target now equal the percentage of those who shop at traditional grocers, both now 78%, “marking a fundamental shift in American shopping behavior driven by persistent affordability pressures.” And with 42% market penetration, discount stores like ALDI and Lidl have overtaken club stores’ 40%.
One behavioral shift that hasn’t quite caught on, is the use of AI to assist with grocery shopping. Only 15% of shoppers say they use AI tools, and those who do can’t agree on how best to use them – 15% use AI to compare prices, 11% to create shopping lists, and only 1.6% to look for discounts and deals. But dunnhumby expects those percentages to grow, as AI tools become more commonplace – and better at helping you save money.
“Through where consumers shop, to their coupon activity in-store, to their AI usage, grocery affordability is set to be a major topic once more,” dunnhumby concluded. “Everything aligns to saving money,” O’Grady added. “When financial insecurity becomes this entrenched, grocery affordability becomes paramount, and shopping behavior doesn’t just snap back.”
So while traditional grocers lean into digital deals that shoppers are finding more appealing, Walmart is counting on attracting cost-conscious shoppers by doing what it does best. “Everyday low prices is what we stand for,” Chief Financial Officer John David Rainey told investors last week. “We’ve seen, as we’ve leaned into these lower prices, that consumers have responded.”
Grocery inflation may be easing. But, whether by clipping coupons or shopping at Walmart, shoppers’ desire to save money appears to be here to stay.
Image source: Walmart
We’re seeing more of our members who shop at Walmart using Cash Back offers inplace of digital or printable coupons. So far, it seems to be more common with online orders.