Walmart Captures Over 25% of U.S. Grocery Market, Attracting High-Income Consumers

Walmart dominates US grocery market, attracting high-income shoppers, as regulators scrutinize industry consolidation and price hikes.

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Dil Bar Irshad
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Walmart Captures Over 25% of U.S. Grocery Market, Attracting High-Income Consumers

Walmart Captures Over 25% of U.S. Grocery Market, Attracting High-Income Consumers

Walmart has solidified its position as the largest grocer in America, capturing over 25% of U.S. grocery dollars in 2024. The retail giant's success has been driven by its ability to attract high-income consumers amid soaring inflation, even as lower-income shoppers have been forced to limit their spending on non-essential items.

The shift in consumer behavior has been evident across the retail landscape, with department stores like Macy's, which cater to middle- to higher-income consumers, reporting strong sales in non-essentials such as tailored suits, gowns, and beauty products. In contrast, discount retailers like Dollar General and Dollar Tree have seen increased demand for food and beverage products, as lower-income shoppers prioritize essential purchases.

Walmart has capitalized on this trend, with affluent shoppers purchasing higher-priced items like gaming consoles and patio furniture at the retail giant's stores. Meanwhile, lower-income shoppers have been shifting to store-brand and smaller-sized products to save money.

Why this matters: Walmart's dominance in the grocery market and its ability to attract a diverse range of consumers highlight the growing income inequality in the United States. The retail landscape's split in shopping patterns emphasizes the challenges faced by lower-income households in the face of rising inflation.

The Federal Trade Commission (FTC) has recently released a report suggesting that the country's largest grocery companies, including Amazon, Kroger, and Walmart, are keeping prices artificially high. The FTC data shows that these companies have gained market share during and after the pandemic, while their profits have continued to rise. The report also highlights a 150% increase in egg prices in 2023, which producers blamed on the avian flu, but the FTC argues that the disease did not justify the drastic price hike.

In the Philadelphia metro area, Walmart has become the largest grocery retailer, capturing 16.6% of the market share in 2022, narrowly edging out Acme at 15.7%. This marks the second consecutive year that Walmart has held the top spot in the region. The company plans to remodel its stores in 2024 and open more than 150 new stores across the U.S. over the next five years as it seeks to further expand its market share and attract high-income consumers.

Regulators are facing increasing pressure to address the excessive power and market consolidation of the largest grocery companies. Some are calling for fines or even breaking up these companies to ensure fair competition and protect consumers from artificially inflated prices. As Walmart continues to dominate the grocery market and attract a wide range of consumers, the debate over the role of regulators in ensuring a level playing field is likely to intensify.

Key Takeaways

  • Walmart is the largest U.S. grocer, capturing over 25% of grocery dollars in 2024.
  • Affluent shoppers buy high-priced items at Walmart, while lower-income buy store-brand products.
  • FTC report suggests top grocers, including Walmart, are keeping prices artificially high.
  • Walmart is the largest grocer in the Philadelphia metro area, with 16.6% market share.
  • Regulators face pressure to address excessive power and market consolidation of top grocers.