Prática de Shadowing: How Walmart Is Beating Everyone In Groceries - Aprenda a falar inglês com vídeo

Sky-high grocery bills are inflicting pain at the supermarket checkout counter. Food at home prices in 2022 jumped 11.4%, and are expected to increase 5% in 2023.

By comparison, prices rose just 0.7% in 2019.

In an effort to stretch their grocery dollars further, a growing number of Americans are turning to Walmart. The Arkansas-based retailer is America's largest grocer, more than twice the size of its next biggest competitor.

One of the biggest drivers for Walmart's grocery business today is, ironically, inflation, as prices have gone up for a lot of items not just food but housing more customers across incomes are turning to its stores.

Known for its low prices and massive footprint, Walmart takes in more than 1 in 4 grocery dollars in the US, a 1.5% increase from 2021.

Walmart's low prices are also resonating with high income consumers, who made up about half of the company's market share gains in food in the fiscal quarter that ended January 2023.

Inflation is having an impact, particularly for those that don't have as much money, so we see them behaving in different ways.

But we're also attracting a lot of new customers to come to our stores, to our app, to our website.

Higher income families are shopping at Walmart because they're so price sensitive right now.

When we think about the grocery landscape over the next five and ten years, we see increasingly middle America and affluent America shifting some of their shopping basket over to Walmart.

To boost its customer base Walmart has enhanced its online shopping experience, added robots to its warehouses, and ramped up programs like drone and direct-to-fridge delivery.

It's also expanded its late night delivery offerings.

As it has gained market share its stock price has continued to climb, but Walmart, along with its rivals, has also faced criticism that it doesn't compete fairly with small, independent grocers.

You will see milk being sold in place of $1 a gallon, less than what I can even buy for, eggs, you know, anywhere from $00.25 to $0.50 or more less than what I can purchase from.

As long as we are not on a level playing field the more we will see grocery store closures across the country, the less opportunity there will be for these consumers.

And with inflation, cooling and prices leveling off will Walmart be able to hang on to its newly acquired shoppers?

One of its big threats is actually regional grocers like HEB or Publix or Wegmans have really strong fan followings.

CNBC looks into Walmart's grocery business to see why even more Americans might be ordering food from the company in the future.

The first supermarket opened in the US in the early 1900s.

Inventions ranging from the shopping cart to the frozen dinner, in addition to the rise of the suburbs, help the format flourish.

Following World War Two, supermarkets emerged as the leading food retailer in the US, with the number of stores more than doubling from 14,000 in 1950 to 33,000 in 1960.

The format was such an integral part of American culture Cold War propagandists used supermarkets to showcase the advantages of capitalism.

Tell me, who could possibly afford to buy food in a place such as this?

This is just an ordinary food market most everybody in America shops in stores like this from time to time.

40s. 50s. 60s. we had an incredibly robust and diverse market.

It's so interesting to me that in the 1950s, independent grocers were about half the market.

They were going like gangbusters, like really thriving. But we also had the growth of these chains like Kroger and Safeway.

Sam Walton opened the first Walmart in Arkansas in 1962.

Two decades later, a full scale supermarket was added, creating the chain's first supercenter.

Around the same time, Walmart launched Sam's Club, its warehouse store.

By the early 2000s, Walmart was the country's largest grocer. Walmart, in its early days, was more of a destination for general merchandise that you needed for your home and your life.

It's increasingly become your regular grocery store.

In an effort to beef up its e-commerce operations in 2016, it purchased online retail site Jet for $3.3 billion. Four years later, the site was discontinued.

If you look at the trajectory of our business, it changed when we made that acquisition.

Not only did we pick up Mark Lore and a great team, we picked up fulfillment centers, a lot of expertise that ended up paying off.

Walmart's competitors were expanding, too.

Between 1997 to 2000, a fifth of all US supermarkets, 4,100 stores in total were acquired.

By 2005 the 20 biggest US grocery stores, including Kroger, Albertsons and Safeway, accounted for more than 61% of total US grocery store sales.

And that consolidation continues today.

Grocery chain Kroger announced in October 2022 its plans to buy rival Albertsons in a deal valued at $24.6 billion.

The US had over 63,000 grocery stores and supermarkets in 2023, employing nearly 3 million people. Together with Sam's Club grocery sales were more than $300 billion at Walmart in 2022, compared with Kroger, the nation's second leading grocer that had sales of $109 billion that year.

But how did Walmart's grocery segment get so big, so fast? For starters, Walmart uses its deep pockets and grocery muscles to negotiate favorable prices with suppliers.

Walmart's scale has always been a huge advantage in terms of its ability to negotiate with suppliers and get really the best terms of any retailer in the industry.

Based on a basket of 45 identical goods that includes milk, a dozen eggs and a frozen pizza, Amazon Fresh prices were about 28% higher than Walmart's.

Target's prices were about 9% higher than Walmart's.

Its massive footprint is another part of its success.

Walmart has more than 4,600 locations in the US alone, enabling shoppers to purchase goods in store or pick up curbside.

About 90% of Americans live within ten miles of a Walmart store. They also act like mini-warehouses.

More recently, Walmart has been testing a way to automatically fulfill grocery orders, so it's adding automation in the back of stores.

It actually made an acquisition of Alert Innovation, which is a company that essentially has a bunch of robots that act almost like a larger version of a vending machine that helps pick different groceries and make it speedier and cheaper to fulfill online grocery orders.

Even this year, they've talked about investing, I think close to $18 billion or $17 or $18 billion in capital expenditures.

A lot of which is going to go toward automation, which should help to drive over time better profitability.

Walmart said it expects 65% of its stores to be serviced by automation by the end of fiscal year 2026.

Automation could make some jobs obsolete.

Walmart, the country's largest private employer, has 1.6 million workers on staff in the US.

It is also upped its e-commerce game and added convenient shopping options to entice high income consumers. It added same day grocery delivery for Walmart Plus subscribers, advertising that delivery could come in as little as 30 minutes.

Walmart has also rolled out multiple delivery options.

Drone delivery, which began in 2021 and is available in a handful of markets including Texas and Florida, has made more than 10,000 deliveries as of September 2023. An additional delivery option for Plus members is Walmart In-Home, available in 46 markets including Miami and Dallas.

The service features a store associate who can deliver groceries to your door, your garage, or even inside your kitchen while you're away from home.

Private label brands have boosted grocery sales as well. Walmart has four of the five most popular private label brands, including Great Value, which was purchased by 72% of US consumers, according to a 2022 report.

You don't want to be in the path of Walmart.

You don't want to be in the path of Amazon.

Ten years ago, there might have been this idea that, oh, you know, the supercenters are all rolled out. There's no more growth ahead for Walmart.

But e-commerce is really this next leg of growth.

And if you can weave in the automation behind it and keep adding to a simpler and cleaner shopping experience, I don't see why we don't get another leg of growth here ahead for Walmart.

And while groceries are considered a low margin business, they also enable Walmart to move customers into high margin discretionary spending categories like apparel and home furnishings.

So Walmart doesn't have to really make much in terms of groceries. They could even lose money on groceries because part of the strategy is to bring people in and then sell them all the other stuff.

Groceries made up 59% of Walmart US's 2022 net sales, followed by general merchandise and health and wellness. Walmart US accounted for 69% of the company's 2022 sales.

Another way Walmart dominates its rivals in terms of grocery dollars is by attracting Supplemental Nutrition Assistance Program benefits.

SNAP is the government program formerly known as food stamps, to help reduce poverty and food insecurity.

SNAP provides nutrition assistance to millions of eligible low income individuals and families.

Almost 97% of Snap shoppers purchase groceries at Walmart in the past year, spending on average nearly $2,300.

More than a quarter of total snap grocery dollars spent in the US went to Walmart that year, compared with about 8% at Kroger and less than 6% at Albertsons.

But what impact did Walmart's low prices have on smaller, independent grocers?

For an independent grocer, the challenge that they're facing right now is that Walmart and a few of the other big grocery chains are going to major grocery suppliers and saying, hey, we're 25% of your sales, and we want you to give us special favors.

We want lower prices than you give to all of our competitors. We want assorted like marketing dollars to come to us.

We want you to organize your packaging to fit our parameters. You know, all of these different things.

And the suppliers, you know, what's their choice?

Critics argue that could create something known as the waterbed effect.

If a supplier lowers prices, they will need to make up for that lost revenue elsewhere by charging smaller grocers more.

Independent grocers account for a third of US grocery sales. Jimmy Wright is the owner of Wright's Market, a 20,000 foot grocery store in Opelika, Alabama.

Typically, what you will see is a community where the entry into Walmart is just it just takes most of all the business in the town.

So even if it doesn't take an independent grocers business completely, it takes it to a level where the store is no longer economically sustainable.

The ten largest US grocery chains, including Walmart, Kroger, Costco and Albertsons saw sales of $863 billion in 2022, 24% higher than 2019.

One of the key reasons why Walmart wants to be in the grocery business is because people need to replenish their fridges. They may not get a new wardrobe, they may not need to buy a toy for their child, but they do need some of those basic items to cook dinner that night, or make breakfast or pack their child's lunch.

And those items tend to drive frequency.

And that frequency can turn into other sales of other items that tend to be higher margin.

And if Walmart can get people to cross the aisle from the dairy aisle to the clothing aisle, that's really where it makes its money.

O que é a Técnica de Shadowing?

Shadowing é uma técnica de aprendizado de idiomas com base científica, originalmente desenvolvida para o treinamento de intérpretes profissionais. O método é simples, mas poderoso: você ouve áudio em inglês nativo e repete imediatamente em voz alta — como uma sombra seguindo o falante com 1-2 segundos de atraso. Pesquisas mostram melhora significativa na precisão da pronúncia, entonação, ritmo, sons conectados, compreensão auditiva e fluência na fala.

Prática de Shadowing: How Walmart Is Beating Everyone In Groceries - Aprenda a falar inglês com vídeo

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