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Amazon holds slim lead in online grocery pricing

‘Price Wars’ report finds Walmart.com is narrowing the gap

Russell Redman

April 4, 2018

3 Min Read
online shopping
artisteer/iStock/Thinkstock

Amazon is maintaining its lead in online grocery pricing but has Walmart hot on its tail, according to a new study by e-commerce specialist Profitero.

Walmart.com’s grocery prices average 1.8% more than those of Amazon, Profitero’s latest “Price Wars: Grocery, Household & Beauty” report found. Within the grocery segment, Walmart matched Amazon’s prices on 67% of the products evaluated.

Closest to Amazon and Walmart in online grocery pricing were Target.com ( 5.8% more than Amazon) and Walmart’s Jet.com ( 5.9% more than Amazon).

Overall, Profitero’s study examined more than 21,000 products across the grocery, household and beauty categories and compared online prices at Amazon, Jet, Target, Walmart and leading specialty retailers within those categories. Only identical products available and in stock in the same pack configuration were compared.

“Competitive pricing remains a focal point among leading online retailers. With consumer buying decisions increasingly based on price and dynamic pricing made possible through technology and advanced algorithms, the so-called ‘price wars’ have escalated,” Profitero stated in the report. “Some recent industry studies have fundamentally concluded that while Amazon is often less expensive than its online counterparts, its price-leading position is being challenged by competing retailers, especially Walmart.”

Where Amazon holds a sharp pricing edge is in its Prime Pantry program, which offers lower prices on select grocery, household and other everyday essential products. Walmart’s and Jet’s online prices average 10.3% and 17.4% more, respectively, than Amazon’s for these items. Target.com comes the closest to Amazon for these products, with prices just 4.6% higher on average.

“The Amazon Prime Pantry program is paying off, helping create price separation from the competition. Prices on Prime Pantry average 10.8% less than those found at other retailers,” Profitero said in its report. “This finding highlights a key advantage of the Pantry model: By bundling products, Amazon can lower prices and still sustain a reasonable profit because once-prohibitive shipping costs are removed from the equation.”

Across the grocery, household and beauty segments, Amazon’s prices average 4.5% less than other retailers. Walmart comes the closest with online pricing in those categories averaging 3% higher than Amazon’s. Also in the competitive mix, though, are Jet.com ( 4.3%) and Target.com ( 6.3%).

“Of the retailers studied, Walmart’s prices were the closest match to Amazon in grocery and household supplies. Walmart also is getting aggressive with price matching, offering identical prices to Amazon on more than half (53%) of all products,” Profitero reported. “This is much higher than the 37% Target matched and 35% at Jet.”

Profitero’s October 2017 pricing study found that Walmart’s online beauty prices actually bested those of Amazon, averaging 1.4% less. However, its latest analysis shows that Amazon has since overtaken Walmart ( 4.7%) in beauty, with Jet.com ( 1.4%) becoming the retailer most closely priced to Amazon. Target.com’s online beauty pricing was 6.7% higher than Amazon’s, while those of CVS.com ( 32.3%) and Walgreens.com ( 35.2%) were roughly a third higher in price.

In household supplies, Amazon’s average prices are 2.6% less than Walmart.com’s prices. Home Depot’s online prices averaged 6.3% higher than Amazon’s, while Jet.com had a 5.8% price difference.

“CPG categories seem more prone to price wars with Amazon than non-CPG categories. We found that Amazon lost about 6.5% of its pricing advantage in CPG versus non-CPG categories,” Profitero stated in comparing its latest findings to those in its October analysis. “This [latest] study found Amazon’s average CPG prices were 4.5% lower than the other major retailers.”

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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