How Whole Foods Steals Walmart Shoppers

Business Insider: “When Amazon’s acquisition of Whole Foods formally went through in August, the e-commerce giant immediately made some changes — most notably, significant price cuts … The biggest source of foot traffic for Whole Foods were regular Walmart shoppers. People who visited Walmart at least twice a month accounted for 24% of new Whole Foods customers the week of the price cuts.”

“Across the board, the customers who defected to Whole Foods from grocery rivals were wealthier than the retailers’ average shopper … Walmart’s regular customers’ average income is $59,264, according to Thasos data; the average income of a regular Walmart customer that is defecting to Whole Foods, however, is $71,697 … While Walmart has aimed for more aspirational customers as Whole Foods cuts prices, Thasos data proves that both retailers are competing for the same shopper: the upper-middle class customer who is increasingly important as wages stagnate for much of the US.”

“All of this means that wealthier shoppers are increasingly influential, forcing bargain-centric retailers like Walmart to expand into more aspirational brands … Walmart is gearing up to cash in on wealthier customers, especially as it expands its e-commerce lines. Whole Foods winning over high-income customers could force Walmart on the offensive in this battle — one that both retailers are determined to win.”


One thought on “How Whole Foods Steals Walmart Shoppers”

  1. While the giants battle it out, other competitors have been taking bites out of Whole Foods for several years.

    In areas where West Coast grocer Smart & Final has a location in close proximity to a WF store, S&F has stocked organic products and priced them below WF for several years. On the west side of Los Angeles where Walmart is nowhere to be found, Costco’s lone outlet has also added organics to its inventory.

    Millennials may not have the inclination to shop in multiple stores (though the need for paper towels and toilet paper made from recycled materials is impossible to justify and imposes a unwarranted premium), but the mix of people in S&F and Costco suggests that every other segment is willing to travel a few extra blocks or a couple of miles to save a substantial amount of money… even after Amazon’s alleged price reductions.

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