Walmart Closing Grocery Price Gap With Amazon

The online price gap for groceries between Walmart and Amazon has narrowed dramatically, new research from Profitero found.

The report, “Price Wars: Grocery, Household & Beauty,” said that only a 1.8 percent average difference exists between Walmart’s and Amazon’s grocery prices online. In comparison, Target and Jet.com, a Walmart subsidiary, both show a 6 percent average higher than Amazon.

A previous study from Profitero, published in October 2017, found an average difference of 3 percent between Amazon and Walmart when comparing online prices in 13 key non-CPG categories across the two retailers, Target, Jet and others. The tighter gap in CPG prices across retailers suggests that CPG categories overall are more prone to price wars with Amazon than non-CPG categories.

“Amazon still reigns as the low-price leader online, but it’s evident that Walmart is making grocery a key battleground for challenging that leadership,” said Keith Anderson, SVP of strategy and insights at the Dublin-based global ecommerce analytics company. “Our latest study confirms that price gaps in online grocery are much narrower than what we found to be the case across other nongrocery categories. Walmart is clearly positioning to win shopper loyalty through aggressive pricing on everyday household essentials.”

The report also found that:

• Walmart is getting aggressive with price matching: The retailer matched Amazon prices on 53 percent of all CPG products studied, and 67 percent in grocery.
• The Amazon Prime Pantry program is paying off, helping create price separation from the competition: Prices on products listed in the Prime Pantry program averaged about 11 percent less than those found at other retailers.
• Amazon regained its price lead over Walmart in beauty compared with Profitero’s October findings: Jet is now nipping at Amazon’s heels in the beauty category, with a price gap of just 1.4 percent between the two. Walmart's beauty prices averaged about 5 percent more, while Target's were almost 7 percent higher.