Online grocery prices intensify war between Walmart and Amazon

Walmart’s online grocery prices are edging closer to Amazon, with only a slim gap separating prices between the two retailers, according to a new study by global e-commerce analytics firm Profitero.

In the report, Price Wars: Grocery, Household & Beauty, Profitero analyzed pricing for 21,000 products in grocery, beauty and household supplies, finding only a 1.8% average difference between Walmart’s and Amazon’s prices for grocery. Target and were both found to be, on average, about 6% higher in grocery than Amazon.

Amazon indeed remains the online price leader with prices averaging 10% less than all other retailers studied. Within grocery, Walmart’s pricing is particularly competitive with 67% of products priced-matched to Amazon, said the report.

This helps explain why grocery prices average just 1.8% more than Amazon. Walmart also has the largest price advantage over the other retailers studied, including a +4% difference compared with the next cheapest retailer, Jet (which barely slid by Target).

The latest study builds upon research Profitero published in October 2017 when the company compared online price differences for 13 key non-CPG (Consumer Packaged Goods) categories across Amazon, Walmart, Target, and other retailers and found that Walmart prices were among the most competitive to Amazon, with an average price difference of 3%.

Furthermore, 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.

Other key findings from the report:

  • Walmart is getting aggressive with price matching. The retailer matched Amazon prices on 53% of all CPG products studied and 67% 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 average about 11% less than those found at other retailers.
  • Specialty retailers continue to lose ground in the battle for price supremacy. Online beauty prices at and averaged about 30% higher than Amazon.

“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 & Insights at Profitero. “Our latest study confirms that price gaps in online grocery are much narrower than what we found to be the case across other non-grocery categories. Walmart is clearly positioning to win shopper loyalty through aggressive pricing on everyday household essentials.”

Information provided by Business Wire