Walmart Expands Its Share of Online Grocery Market

Walmart has significantly increased its share of the online grocery market, continuing a trend observed in the third quarter of 2024. According to the Brick Meets Click’s Q3 report, online grocery sales grew 13.8% to $27.4 billion, with delivery orders leading the charge, experiencing a remarkable 25% growth.

In detail, the growth in online grocery sales broke down as follows:

• Delivery Orders: Grew by 25%
• Ship-to-Home Orders: Increased by 15%
• Pickup Orders: Rose by 5%

Mass merchandisers like Walmart have seen their share of the delivery market rise by 390 basis points, reaching 52.7%, while traditional supermarkets’ market share dropped by 250 basis points to just under 38%. The report highlighted that the growth in mass merchandise’s ship-to-home segment increased by 150 basis points to 16.4%, primarily at the expense of Amazon, which saw a decrease of 100 basis points, capturing 50.1% of the segment.

Despite the positive performance in ship-to-home and delivery, big box retailers experienced a slight decline in their pickup market share, dropping 70 basis points but still holding 56.1% of that segment. This shift toward mass merchandisers in the delivery space is attributed to Walmart’s aggressive membership strategy, which has boosted demand for its delivery services.

David Bishop, a partner at Brick Meets Click, emphasized the need for retailers to strengthen their value propositions and adapt to changing shopper expectations. He noted that Walmart has excelled in understanding online shoppers’ preferences and effectively utilizing its extensive store network and digital capabilities to outpace overall market growth.

Overall, the report indicates that:

• Monthly active users for online grocery shopping grew by 200 basis points to 56%.
• Those spending a quarter or more of their weekly grocery budget online increased by 3 percentage points compared to the previous year.
• Total online grocery spending now accounts for 14.6% of the overall grocery market.

However, the trend of cross-shopping online remains a challenge for traditional grocers, with one-third of monthly active users also making online purchases from mass merchandisers. Mark Fairhurst, chief growth officer at Mercatus, advised that traditional supermarkets need to deepen customer relationships and enhance their services to compete effectively against giants like Walmart. He emphasized the importance of leveraging customer insights to create personalized experiences and targeted savings, which is achievable only through effective data operationalization.