From being a single discount store in 1962, Walmart has evolved into one of the largest retail corporations worldwide. Operating under 55 different names and with 11,300 stores across 27 countries, it provides an array of products like electronics, furniture, home appliances, drugs, construction materials, clothes, grocery items, and more, allowing it to remain at the forefront as one of the biggest retailer chains in the world.
In 2022, the company generated revenue of $611.289 billion, while its e-commerce sales surged by 17% within the last three months of 2022, giving optimism to Walmart’s prospects for growth. That said, they also operate Flipkart and Sam’s Club, which add significantly to their annual revenues.
However, formidable competition from rivals such as Amazon, Costco, Kroger, Target, Alibaba, Walgreens, Home Depot, Best Buy, CVS Health Corp., Whole Foods, Carrefour Group, IKEA, Tesco, Kohl’s Corp., and Instacart, amongst many others, may have a negative impact on Walmart’s market share, hence necessitating thoughtful policies when reinforcing their strategies.
Walmart Competitors and Alternatives
Amazon is an eCommerce behemoth that has established itself as the ultimate online shopping destination for consumers worldwide. Its exceptional scalability has enabled it to expand its reach to 9.7 million vendors in its third-party store and generate a staggering $117.7 billion in revenue in this single market. It’s no surprise, then, that Amazon has become one of Walmart’s fiercest competitors.
To compete with Amazon’s industry dominance, Walmart has quickly ramped up its digital presence through innovative tools such as its automated “Pickup Today” system for same-day delivery orders and convenient quick access to online orders.
Nevertheless, although these efforts do come close to matching Amazon’s level of success during head-to-head comparison tests due to factors such as product availability and pricing range, Walmart still lags behind when it comes to overall market share. Despite this, Walmart is doing all it can to keep pace with the rapidly changing landscape of eCommerce retailing by offering a wide variety of competitively priced products across multiple platforms, both offline and online.
Costco is a strong competitor to Walmart, offering consumers discounted prices on brand-name items and everyday goods, making it an attractive option for budget-conscious shoppers.
Both companies offer an expansive selection of products spanning numerous categories, including groceries, apparel, electronics, pharmacy, and office supplies. However, the key distinction between the two rivals lies in the size and location of their stores -— Walmart has more store locations in small towns and rural areas, compared with Costco’s focus on large cities.
While Walmart’s stores tend to be much larger, providing customers with extensive product selection but enhanced external visibility due to their size, Costco outlets often remain smaller – delivering less visibility from outside but enough selection to be valuable to shoppers.
When it comes to pricing, both competitors typically provide competitive costs; however, Costco offers bulk discounts that make them an even more economical option for wholesale buyers. They also offer exclusive brands within each product category to attract clients who are seeking unique items or greater quality goods at a discounted price in comparison to other stores. To compete against Walmart’s vast array of products among numerous consumer groups, Costco primarily concentrates on selling high-quality products at reduced prices with bulk purchases and private labels such as Kirkland Signature.
Kroger is one of Walmart’s most prominent competitors and is known for being one of the most successful grocery stores in the United States. As of 2023, it operates 2,800 stores across the country and employs 465,000 individuals; the company plans to double its 2021 numbers, which will grow further as new fulfillment centers are established across the U.S. that will double digital sales by 2023, according to CEO Rodney McMullen’s predictions.
Kroger has a major advantage over Walmart through its diverse online services. Although not as advanced as Amazon or Target, Kroger’s e-commerce has dramatically improved, ranging from their Clicklist ordering system to Instacart delivery, offering customers the option of shopping at thousands of local stores without having to visit in person.
Kroger’s loyalty plans are also specifically designed to reward consumers that make repeat purchases both in-store and online; for instance, the rewards program enables customers to receive digital coupons based on purchase history through all channels: in-store, online ordering, or curbside pickup, encouraging them to revisit favored channels.
In spite of competition from larger retailers such as Walmart, Kroger remains committed to its leadership role in the grocery industry by continually building on its existing successes and employing cutting-edge technology such as e-commerce platforms and customer loyalty programs.
Target’s competitive advantage lies in its ability to offer a variety of products, such as beauty care products, apparel, and home furniture, while still maintaining competitive prices. This is supported by the retailer’s strong online presence and its successful click-and-collect program — both of which have positioned Target to receive larger shares of online orders and create value for customers.
Target has invested heavily in expanding and deepening its supply chain capabilities. This was evident during the COVID-19 pandemic, when the company was able to quickly adapt to changing customer demand. The company also made an enhancement to store operations that enabled it to fulfill more digital orders from stores than ever before. As a result, Target’s same-store sales grew 19.3% year over year in 2020 versus Walmart’s 8.7%.
Alibaba is one of the world’s best-known online shopping destinations, drawing in consumers from around the globe. As a Walmart competitor, Alibaba gained recognition in 2019 when it opened its marketplace for American suppliers.
Alibaba has become increasingly attractive to sellers and buyers due to its innovative features meant to make their experience on the platform better. It offers various convenient services for customers, such as Alipay, which makes payment transactions easier; Tmall Global, which helps global brands reach Chinese consumers; and logistics solutions, such as Cainiao Network, which allows international shipments within two days for some markets.
In addition, with over 903 million active buyers on the platform, Alibaba provides an excellent opportunity for businesses who want access to new customers worldwide or wish to expand their customer base closer to home in the U.S.
Walgreens has seen considerable growth over the years, holding a 19.1% market share against Walmart’s 4.7% and becoming one of its main competitors. As a top pharmacy retailer, Walgreens caters to nearly all drug categories, including prescription medications, over-the-counter medicines, vitamins and supplements, health care products, and beauty supplies. They also supply contact lenses along with eye exams via Walgreens clinics in select areas. In addition, they provide home delivery services for those who are unable or uncomfortable visiting a physical store due to COVID-19 restrictions or any other reason.
They have taken steps into the digital world by expanding their eCommerce platform, offering convenience when shopping for healthcare products. They provide mobile apps that enable customers to order items online and pick them up at any location or have them delivered right to their homes, with same-day delivery being available in select areas.
Home Depot is a key competitor of Walmart that operates a physical retail network that directly competes with Walmart. The company’s vast stores and differentiated product offerings help bring more customers into its stores.
Unlike Walmart, which mainly focuses on grocery and general merchandise items, Home Depot offers a wide range of products related to home improvements, such as plumbing fixtures, electrical supplies, garden tools, paint, and brushes. This means that instead of having to buy home improvement essentials from different places, customers can quickly get all their requirements at one place — Home Depot.
The store setup is also customized according to the customer’s needs — they offer demonstration tables for power tools and test drives for lawnmowers and snow blowers before purchase. This provides a superior shopping experience compared to Walmart’s mostly generic offering.
Home Depot has taken full advantage of technological advancements like augmented reality, connecting their systems to provide customers with an accessible and integrated omnichannel experience, allowing them to shop in-store or online via mobile or desktop. The company also centers around personalization, helping DIYers find the items best suited for them through personalized recommendations.
Best Buy is currently one of Walmart’s top competitors, thanks to the company’s innovative ship-from-store capabilities, integrated strategy, and market success. The consumer electronics retailer operates 1,043 stores across the U.S., with nearly half of them utilizing its Ship-from-Store program. This intelligent strategy has enabled Best Buy to bolster its pickup and delivery operations significantly, resulting in a 242% increase in domestic online sales since the program was implemented.
In 2022, Best Buy was able to generate $51.761 billion in revenues. This represents a 9.52% year-over-year growth for the company, which earned $47.262 billion in 2021.
Best Buy continues to challenge Walmart as a formidable retail force due to its growing focus on business analytics that allow it to gain greater insights into consumer habits and buying decisions on its platform.
Competing fiercely, Walmart and Best Buy have implemented various loyalty programs, such as the “My Best Buy Program,” to influence pricing strategies. Customers can receive points or discounts when purchasing goods, while Walmart’s Everyday Low Prices initiative provides lower prices.
CVS Health Corp.
CVS Health Corporation is a leader among Walmart’s top competitors in providing innovative healthcare solutions to customers across America through both brick-and-mortar outlets and digital media platforms such as apps that offer remote video calls with doctors, virtual checkups, and reliable customer service teams available 24/7.
These services have proved advantageous to the company, having attracted 70 million loyalty members thanks to discounts across various products, from drugs and nutritional supplements to foodstuffs and cosmetics; additionally, they also have 1,100 walk-in medical clinics nationwide providing health screenings and easily scheduled appointments, even during the coronavirus pandemic when contactless deliveries are encouraged.
Notably, their unique services, such as HIV/STD testing facilities, protected under HIPAA compliance regulations to maintain the highest confidentiality of patient information, have provided a sizable annual profit projection of over $400-$500 million, propelled by the U.S. government’s selection of them in February 2021 to be part of a nationwide vaccination drive.
This example demonstrates how sound business decisions combined with sensible financial management practices have fostered success in terms of infrastructure scalability and the achievement of goals that few other companies can match.
Whole Foods Market is well known for stocking top-quality products at premium prices, making it a direct competitor of Walmart. While Walmart tends to offer lower prices generally due to its larger size, Whole Foods offers higher quality organic food items as well as foods free from artificial preservatives, colors, flavors, and sweeteners that Walmart may not carry. This allows Whole Foods to focus more on smaller offerings of higher quality goods that appeal to specific shoppers looking for less processed foods or alternatives, such as plant-based options.
Whole Foods’ commitment to sustainability differentiates it from Walmart, as they collaborate with more than 1,400 independent local farmers and vendors in the U.S. to ensure its stores across the country, as well as in Canada and the UK, receive fresh ingredients. This demanding process is much harder than opting for generic suppliers offered by large corporations, like other retailers often do.
Whole Foods’ efforts also guarantee customers get consistent supplies while still meeting their set standards — i.e., avoiding GMO ingredients and pesticides and only using organic farming practices when feasible — a practice that has been in place since the company was established in 1980 by John Mackey and Renee Lawson Hardy.
With its well-established presence across Europe, the Americas, Asia, and Africa, this French multinational has positioned itself as a serious rival in terms of large-scale retail sales and customer convenience. In 2021, it reported earnings of $87.888 billion with a growth of 6.64%, indicative of healthy performance year over year, not the least considering that it employs over 319,565 people worldwide at 13,500+ stores across 30 countries.
In the wake of the 2020 coronavirus pandemic, Carrefour experienced a dramatic surge in online sales, which allowed them to build upon their digital capabilities and substantially expand both their reach and appeal. These gains have propelled them towards achieving their goal of becoming an omnichannel retail business, thus enabling them to compete with Walmart in large-scale global retailing now and into 2023.
Ikea is one of the most iconic and successful furniture companies in the world, a position that has allowed them to become a top competitor to Walmart. While Walmart has seen some success in the furniture market, Ikea’s massive presence worldwide and its 70-year run with its world-famous annual catalog have made it harder for Walmart to compete.
For starters, while they have fewer stores, Ikea’s furniture customer base is larger than Walmart’s, as they have 460 stores across 62 countries globally; this allows Ikea to create an international presence that other stores simply cannot match. In addition, despite announcing that 2021 will be their last catalog year, it still speaks volumes since it was published in 32 languages and sent out to 200 million homes in 50 markets during 2016 alone.
Given its immense size and global reach, Walmart has historically had an advantage over smaller competitors like Ikea when it comes to store locations and price points. However, with online sales increasing rapidly, much of that edge is being neutralized as more shoppers are turning to e-commerce options such as Ikea.
In addition to these innovations that make Ikea more competitive with Walmart in terms of convenience and cost savings, Ikea also offers something unique: styling suggestions tailored just for your home or office space. Customers can browse through tens of thousands of different combinations using 3D renderings (without ever leaving their homes), which helps them find the perfect piece at an unbeatable price point.
From humble beginnings selling groceries from market stalls in London’s East End in 1919, Tesco has grown into an impressive international giant, boasting over 4,500 stores across 12 countries, including Thailand, Ireland, the United States, and its native Britain — where it holds a near 30% market share with annual revenue of $84.139 billion according to 2022 figures.
For nearly two decades, Tesco has been locked in competition with Walmart since their 1999 acquisition of ASDA Group Ltd. (Walmart sold ASDA in 2021). Much of this competition can be attributed to its endemic presence within the UK retail grocery sector, as well as its loyalty reward system, which was implemented decades ago and still benefits customers today by offering discounts on both groceries and luxury items.
Kohl’s is one of Walmart’s primary competitors in the United States and is a popular alternative for customers looking for quality products at affordable prices. With over 1,100 stores across 49 states and an online shopping platform, Kohl’s has established itself as a leader in the retail industry and offers a wide variety of products ranging from clothing to home decor.
In terms of pricing, Kohl’s typically falls slightly higher than Walmart while still offering competitive discounts and savings through its loyalty program, Kohl’s Cash. The company has also taken initiatives such as sustainability pledges and corporate social responsibility campaigns that some consumers find more attractive than Walmart’s offerings.
Kohl’s also benefits from having several well-known brands under its wing, including Apt 9, Jumping Beans, and Sonoma Goods for Life, which are considered higher-end compared to some of Walmart’s house brands (i.e., George). While most shoppers have come to recognize Walmart as an affordable option for low-cost goods, many have shifted their attention towards department stores such as Kohl’s in search of better quality items due to its more upscale product selection and lower price points when compared to other retailers such as Macy’s or Nordstrom.
Instacart has become a major competitor to Walmart in the online grocery market. Since its launch in 2012, Instacart has grown at an exponential rate and expanded into 5,500 cities and towns across North America. This expansion has enabled the grocery delivery company to reach 85% of American households.
While this puts it in direct competition with Walmart — which had already established itself as one of the top players in the online grocery industry — it is also helping advance the convenience trend by providing on-demand food delivery services for customers.
Their most recent funding round in March 2021 increased their valuation to $39 billion and cemented their position as one of Walmart’s biggest competitors in terms of online grocery services. Conceivably, this has allowed Instacart access to more resources, allowing them to further compete against Walmart’s dominance across multiple markets. By contrast, Walmart’s financial records show a lack of growth and profits from its online business model compared to other competitors, such as Amazon.
Walmart is an incredibly successful corporation, and its competitors should not be taken lightly. Target, Costco, Amazon, etc., all offer different product selections, pricing strategies, customer service policies, and delivery systems that give them the unique ability to compete with one of the largest retail companies in the world.
Despite their differences, these three big-box retailers share a competitive edge against Walmart as they look to further innovate their products and services while also catering to particular niches within the retail market.
As technology advances and customers become more accustomed to online shopping, competition will only increase for Walmart. Its competitors are prepared for this challenge by investing heavily in digital capabilities, including greater data analysis tools, so they can better understand customer needs and preferences. All 15 of these retailers have bright futures ahead if they remain vigilant in staying on top of industry trends and innovating accordingly; only time will tell which business reigns supreme in the end.