Amazon Prime vs. Walmart+ in race for grocery

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As Amazon continues to steal grocers’ shares of center-aisle purchases, smaller retailers are drawing inspiration, according to the latest survey from news and analysis company PYMNTS.

Drawing from a survey of nearly 2,700 U.S. consumers conducted last month, results also reveal that 61% of U.S. consumers are Amazon Prime members, 26% are subscribed to Walmart , and just 35% of consumers are not members of either service, leaving room for increasing membership growth. 

Why is Amazon ahead of the race? The survey attributes it to the company’s widespread reach, the savings on consumer-packaged goods, and shelf-stable items offered via Subscribe & Save. In fact, the data shows that 42% of consumers participate in these product subscriptions.

Arguably most important to note, President and CEO Andy Jassy said in Amazon’s annual report that its center-aisle assortment consists of 3 million items, which towers over the “typical supermarket’s” 30,000-item selection in the same areas.

With the sheer volume of assortment numbers in the store versus online, how are grocery retailers trying to keep up? 

Kroger made plans to leverage the lower cost of its membership, as explained on the company’s last earnings call. “We launched Boost, the industry's most affordable membership nationwide in July,” Kroger CEO and Chairman Rodney McMullen said on the call. “Early results are exceeding our expectations with incremental engagement and overall household spend.” 

Related:74% of grocers believe that digital shopping has made shoppers less loyal

Kroger also made plans to make significant investments to build out personalization capabilities, including increasing the use of real-time data to predict customer needs in 2023, “which will support sales growth during the next three years.”

Hot on Amazon’s heels is Walmart where membership lies within Walmart and Sam’s Club. CEO Doug McMillon said on the company’s latest earnings call that Sam’s Club membership counts and premium Plus membership reached “all-time highs” last quarter, with the total number of members up almost 30%.

Additionally, warehouse chain BJ’s Wholesale Club shared on its earnings call on May 23 that it has been “looking to the Walmart-owned warehouse club chain for inspiration on driving enrollment with discounting,” especially as consumer data shows inflation-weary shoppers are chasing deals to get the best prices, regardless of where it takes them.