Walmart Is Losing Grocery Market Share to Smaller Rivals

By Sheridan Fifer

Walmart's performance during these months of pandemic has been stellar. But analysts are noticing a troubling trend for the retailer: grocery dollars are migrating to Walmart's supermarket rivals.

Traditional supermarkets such as Kroger and Albertsons have been rediscovered by consumers. There are a few reasons for the shift, one of them being that Walmart's customers as a group don't eat out as often as the customers of other supermarket chains. So when the coronavirus closed restaurants, money that would have been used for dining out was instead spent at traditional supermarkets. These supermarkets have seen accelerated gains because they have largely abandoned their discounting strategies for the duration of the crisis, instead selling more goods at full prices. Walmart's everyday low prices guarantee means that it will not see these kinds of gains. 

Still, experts aren't sounding the alarm. With a vaccine on the way and restaurants reopening, analysts expect Walmart will remain on top in the long run. 

“It’s a big deal if the share loss is permanent,” said Simeon Gutman, an analyst at Morgan Stanley. “We think it’s temporary.”

Read the full story at Bloomberg.