“Walmart’s growth in households making $200,000+ per year shows that the ‘flight to value’ has even affected how this income group shops for groceries,” said David Bishop, partner at Brick Meets Click. “Affluent households that shop online for groceries at Walmart spend 1.5 times more each month than households in the lowest income bracket, making them a very attractive customer segment to target and win over.”
Increased online penetration into the affluent household segment by Walmart has come at a time when lower-income households at many formats/banners are pulling back their online spending to varying degrees. The analysis, powered by data from the monthly Brick Meets Click/Mercatus Grocery Shopping Survey, found that for households making under $50,000 annually, Walmart’s sales dipped 6 percent and Supermarkets and Target dropped 20 percent respectively.
Walmart’s gains with affluent eGrocery shoppers also appear to have come at the expense of Supermarkets, Hard Discount and Target, who each posted a decline in sales with this group.
In addition, overall average order values (AOV) declined at the formats/banners in the analysis except for Walmart. Walmart’s overall AOV held steady year over year due to mixed results across the income segments as its AOV for eGrocery orders placed by affluent shoppers surged more than 40 percent to $119 compared to last year while the AOV for its lowest income users shrank by almost 6 percent to $84.
Overall eGrocery order frequency rates at Walmart increased slightly in the first half of 2024, inching up by about a half of a percentage point to 1.97 monthly orders versus 2023. Although order frequency dropped over 10 percent for households making more than $200,000 to 2.02 monthly orders, the combination of two-plus orders per month and an AOV close to $120 shows the value of these affluent customers to Walmart’s eGrocery business.
In looking at where else Walmart’s customers chose to buy groceries online during the same month, Supermarkets retained the top spot for cross-shopping, edging out Amazon’s pure-play services. Approximately one in six (16.8 percent) of Walmart’s MAUs also bought groceries online from a Supermarket format within the same month during the first half of 2024, slipping 28 basis points (bps) versus the 2023 period.
The dip in the overall cross-shop rate with Supermarkets was entirely driven by less cross-shopping among Walmart’s least and most affluent households, signaling that Walmart may be capturing a greater share of wallet for these segments.
"Regional grocers risk losing more of the business that’s driven by affluent customers to Walmart if they don’t effectively address shifting expectations,” said Mark Fairhurst, chief growth officer at Mercatus. “To retain existing affluent shoppers and possibly attract others, grocers need to strengthen their value propositions by offering unique products, personalized promotions, exceptional service, and enhanced digital experiences that elevate customer satisfaction."
