In today’s increasingly competitive market, it doesn’t matter how good your branding is, which celebrities endorse your products, or how many catchy jingles you’ve got.
If you aren’t expanding while also bringing down the cost of goods, you’re probably losing out. At the very least, you’re leaving money on the table.
Related: Formerly bankrupt Home Depot rival returns with major changes
Today’s consumers are increasingly price-sensitive. Inflation is up, and groceries cost 28% more than they did five years ago.
The average cost of a dozen eggs is $4.15, and a gallon of milk averages $4.10. That means a simple trip to the grocery store adds up into double — or even triple — digits very quickly.
And when you have to stretch your dollars even further just to afford the cost of common everyday items, shoppers get choosy.
To cut costs some put fewer items in their baskets and others will opt for private-label brands like Giant’s Nature’s Promise. Still others will shop at discount retailers like Walmart (WMT) in the hopes of finding the best deals in town.
In fact, many more folks are now shopping at Walmart to help ease the strain on their their wallets.
“It’s much broader and appeals to a lot more customers and members,” Walmart Chief Financial Officer John Rainey said recently, adding that C”the quality is just much different than what you’ve seen historically.”
A Walmart associate stocks a produce display. Consumers often look to the chain for sharp discounts on groceries.
Image source: Joe Raedle/Getty Images
Walmart continues gaining share
Even prior to the pandemic, which changed the way retail operates irrevocably, Walmart was in a prime position to capture more customers.
With a Walmart located within 10 miles of 90% of the U.S. population, most folks are already well aware of the cost-saving prospects at their local one. So when the chain began to roll out more robust online efforts, the sell wasn’t too difficult.
Walmart rolled out Walmart+ in 2020 as more folks shifted their shopping habits to a more remote operation. With more than 4,600 locations around the U.S., most stores were able to easily double as fulfillment warehouses.
Related: Major Walmart rival chain makes a big pricing change
And with inflation higher and more people seeking deals, Walmart is able to cut pricing without damaging profits. It is currently making a major discounting effort, rolling back prices of many essential grocery items to preinflation points.
The effort is working, and drawing not just those of more modest means: Walmart claims it’s seeing more wealthy customers — those with salaries of $100,000 or more — come through its doors.
Walmart to expand a winning plan
Since this has been such a successful model in the U.S., Walmart now plans to scale its achievements elsewhere.
It said on Jan. 30 that it would invest C$6.5 billion (US$4.5 billion) to “accelerate growth in Canada.”
More Walmart:
Walmart customers outraged over popular product price increaseWalmart, Target, Costco make major 2025 announcementWalmart exec drops a bombshell about $840 billion market
The scheme includes a plan to open dozens of stores across the country, with several Supercenters and distribution centers within the next two years. Those locations will be in:
Port Credit Walmart Supercentre in Mississauga, OntarioOakville, Ontario, Walmart SupercentreCalgary SupercentreEdmonton SupercentreFort McMurray, Alberta, SupercentreVaughan, Ontario, Distribution Centre
Several of these locations are expected to open within 2025.
Some of the investment will also go to ramp up Walmart Canada’s supply-chain efforts and efficiencies. It said that Canada Cartage has acquired its Walmart Canada fleet business.
The more than 110-year-old trucking and transit company will take over Walmart Canada’s supply-chain efforts and is expected to modernize how the company fulfills orders there.
The investment “is the largest we’ve made in Canada towards expanding our footprint since we first arrived here 30 years ago,” said Gui Loureiro, Walmart Canada’s regional CEO for Chile, Mexico and Central America.
Related: Veteran fund manager delivers alarming S&P 500 forecast
