Costco ‘punching above its weight’ with WalmartCostco ‘punching above its weight’ with Walmart

Warehouse chains are on a roll, and Costco is leading the way, growing faster than its biggest rival, Walmart, over the last five years, according to Michelle Evans, global lead of retail and digital consumer insights at Euromonitor International.

Evans discussed the rise of warehouse clubs and other grocery retail trends at the National Retail Federation’s Big Show expo in New York City on Jan. 12. 

Walmart, which is some two-and-a-half times the size of Costco, was bested by the warehouse chain, which grew 7% faster over the last half decade, Evans said. 

“So we’ve seen warehouse clubs in this channel expand by 10% in recent years, and we expect strong growth this year, about 2% in North America,” she said. “So again, that is faster than that 1% for the overall retail sector.”

Costco is “very much punching above its weight,” she added. 

Evans noted that ecommerce grocery sales are growing across the globe, with 80% of consumers in a recent Euromonitor International survey saying they have purchased groceries online. 

In the U.S., Walmart and Amazon dominate the market, but a closer look at the numbers reveals some big shifts in the space over the last few years, according to Evans. 

“[Walmart and Amazon have] been duking it out  for a number of years, trying to steal market share from one another, investing in different ways to try to capture that,” Evans said. “And while they are the two behemoths in the room, you have to peel back the onion a bit, because the story is a lot more nuanced in terms of where they’re succeeding and failing.” 

Amazon dominates in non-edible sales, while Walmart controls the edible perishable and edible non-perishable market, she said. But between Q3 2022 and 2024, Walmart captured 2.64% in non-edible, 5.95% in edible non-perishable, and 7.8% in edible perishable.

Meanwhile, Walmart is also winning over high-income shoppers from mass merchandise grocery retailers like Target. The biggest shift is in non-perishable items, Evans said.

Price versus value is still the top priority for consumers, but that dynamic is changing, according to Evans. “It’s still the top shopping motivation, but what this is telling us is that something else is coming into play here. So price alone isn’t the only purchase driver,” she said.

Consumers are increasingly considering the quality and authenticity of the product, and whether it aligns with their personal values. Thirty percent of consumers in North America said in a Euromonitor International survey that they will buy from brands that align with their political and social beliefs, and 25% of consumers globally will boycott buying products that don’t, Evans said.