Dollar for Dollar: Walmart loses price gap comparison with competitors in its home market

by Kim Souza ([email protected]) 4,524 views 

Editor’s note: The price comparisons in this story were done March 30 at stores in Bentonville located within 1 mile of each other.


With inflation at a 40-year high to start 2022, consumers are more aware of the rising food and fuel costs. In a recent earnings call, Walmart CEO Doug McMillon told analysts the retailer would hold the line on prices to continue growing its grocery share.

“During periods of inflation like this, middle-income families, lower-middle-income families, even wealthier families become more price-sensitive, and that’s to our advantage,” McMillon said. “So we’ve been through this before, and we run with inflation around the world all the time. But inflation is a different environment in the U.S. right now than it has been in recent times, for sure.”

“Everyday low prices” is at the heart of Walmart’s business model, and McMillon said merchants are having more talks with suppliers to mitigate inflationary pressures on the business.

Walmart did see same-store sales rise 5.6% in the fourth quarter. The company reported grocery comps increased by the high single digits in the period with sales growth and market share gains aided by slightly wider price gaps than pre-pandemic levels expanded digital offerings. Walmart was seen as taking market share in grocery in the fourth quarter ending Jan. 31.

To test price gaps in Walmart’s home market of Bentonville, the Northwest Arkansas Business Journal conducted on March 30 a price comparison against Aldi and Dollar General. The comparison results show Walmart does not have the lowest price on at least 19 grocery and consumable staples. The shopping list included store brands and a few national brands. The basket included eggs, milk, bread, bacon, canned tuna, frozen chicken, canned green beans, canned chili, deli ham, mayo, peanut butter, saltine crackers, cereal, trash bags, laundry detergent, toilet paper, toothpaste, aspirin, shampoo and conditioner.

The Walmart basket of the 19 items cost $64.16, 16% more than the same items at Aldi. The Aldi basket cost $55 and had the lowest prices overall on 16 of the items compared. Aldi was the low price leader overall, saving a shopper $9.16.

Dollar General’s total basket cost was $62.55 after coupons, which was 2.5% less than the Walmart basket but 13.75% more expensive than Aldi. The most significant price gap between the three discount competitors was for a gallon of 2% milk and a dozen large eggs. The milk at Aldi was $2.27 compared to $4.03 at Walmart and $4.25 at Dollar General. The eggs cost $1.43 at Aldi compared to $1.91 at Walmart and $2.95 at Dollar General. Black Forest ham for sandwiches also showed wide price gaps between Aldi and the other discounters. The 8-ounce store brand of ham costs $2.99 at Aldi, whereas the Great Value ham in the same size costs $4.78. Hormel ham sold at Dollar General costs $3.98 for 8 ounces.

The price gaps were closer between the competitors on branded items such as Tide detergent, Jif peanut butter and Honey Nut Cheerios. Aldi had a small price gap with Dollar General and Walmart on the 28-ounce jar of Jif Creamy Peanut Butter, costing $3.98. The same item cost $4.15 at Walmart and $4.25 at Dollar General. The large Honey Nut Cheerios cost $3.49 at Aldi compared to $3.98 at Walmart, while Dollar General had the cereal on sale for $3.50, with a 75-cent digital coupon. Other national brands such as Tide, Crest and Hellman’s mayo showed tight price gaps between the competitors.

Simply Tide detergent was priced at 14.7 cents per load, with the Walmart bottle costing $3.24 for 22 loads. The same product bottled for 20 loads costs $2.94 at Aldi, the same 14.7 cents per load at Walmart. Dollar General had a digital coupon for the Simply Tide product, which took the final cost down to $2.75 per bottle. The Dollar General bottle came out to 13.75 cents per load at the coupon price. Without the coupon, the Dollar General price was $3.25 for 20 loads and more expensive than the other two retailers.

The large tube of Crest toothpaste was cheaper at Dollar General because of the $1 coupon. The large tube cost $2 at Dollar General, $3 at Walmart and $3.12 at Aldi for 0.2 more ounces than sold at Walmart.

Pantene 2-in-1 Shampoo and Conditioner cost $3.47 at Walmart for 10.4 ounces. That equates to 33.3 cents per ounce. A 12-ounce bottle at Aldi costs $3.79, which comes to 31.5 cents per ounce, a slightly better value than the smaller Walmart bottle. For the best value, Dollar General’s 17-ounce bottle of the same product costs $5, equating to 29.5 cents per ounce.

Frozen chicken was another area where Aldi beat Walmart. A 48-ounce bag of Great Value skinless, boneless chicken breasts was $8.37 at Walmart and $6.99 for the same size bag of Kirkland’s chicken brand at Aldi. That’s a savings of 19.7%. Dollar General sold a smaller bag of chicken, a Tyson Foods brand, which cost $6.95 for 32 ounces.

Toilet paper and other nonedible consumables like trash bags were closer in price among the three retailers. Using the Great Value store brand at Walmart, Aldi’s store brand and Dollar General’s store brand, that each compares to Scott’s 4-roll package, the cost was $4.88 at Walmart, $3.99 at Aldi and $3 at Dollar General, which had the best overall value. Walmart had the best value on store-branded large kitchen trash bags at $6.92 for 50 bags. The comparable item at Aldi had 40 bags selling for $6.49, and Dollar General sold similar bags for $7. The cost per bag at Walmart was 13 cents, compared to 14 cents at Dollar General and 15 cents at Aldi.

Scott Benedict, an executive at Rogers-based WhiteSpyder and a former Walmart buyer, said it’s sometimes hard to tell if product quality is equal when looking at private brand products. He said Walmart has worked to improve its Great Value private brand quality. Aldi is also known for high-quality private brands.

Benedict agreed that Walmart might not have the lowest cost on a basket of goods on any given day. Still, the retail giant does offer shoppers more variety, various size packs and a broader assortment of many grocery items. Aldi and Dollar General offer a limited inventory because they operate smaller formats. Walmart also has the edge in online ordering and pickup convenience at no added costs. Aldi partners with Instacart, and there are delivery costs with online orders. Dollar General also offers online order pickup through the retailer’s mobile app that allows customers to apply coupons at checkout, a feature Walmart does not provide.

Benedict said the item pricing game takes constant attention, and retailers like Dollar General will use coupons to stay competitive on certain items. He said Aldi is a deep discounter with limited assortments, but they are stout competitors in dairy, fresh food, and other categories. He also said pricing is relevant to locality and the competition in a specific market.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.