Batteries can be used as an example of Walmart’s alleged influence over suppliers in grocery.
Reuters has come out with a report that claims Walmart has been able to keep grocery prices steady while inflation explodes, leaving competitors at the starting blocks in the race to capture market share.
However, Walmart’s influence might be better explained following a lawsuit filed by consumers and retailers involving Energizer batteries. According to the lawsuit, Walmart pressured Energizer to inflate battery prices for competitors and required retailers not to undercut Walmart in price back in 2018.
Could it still be happening in the grocery sector? There is no hard evidence that is indeed happening, but Walmart is doing something to remain price king during the worst dose of inflation in decades. The Reuters report shows data from Dataweave looked at prices of 589 name-brand products covering 34 categories. Coffee, soup, cereals, baking goods, batteries, personal care items, pet food and other areas were looked at daily between January 2022 and February 2023. Inflation during the study averaged 7.5% while Walmart kept its prices relatively lean. Walmart stores and Walmart.com showed a price increase of about 3% while the same products showed a spike of 7.5% on Amazon and 9% at Kroger and Target.
Dataweave broke it down even further by taking a look at a sample basket of 10 food items between January 2022 and February 2023. Pringles potato chips, Miracle Whip and Del Monte Green Beans were among the products in the basket, and Walmart’s prices were 4.6% lower than Target, 14.8% lower than Kroger and 17% lower than Amazon.
Walmart owns a 42% share of the grocery market in terms of on-site buying. In fact, Walmart accounts for $1 out of every $4 spent on food.
The Robinson-Patman Act makes price discrimination illegal, but Congress might not be doing enough to enforce it as the National Grocers’ Association and the Wholesale Grocers Association have been pressing lawmakers recently to prevent the influence of grocery giants.
In mid-April, Walmart Chief Merchandising Officer Charles Redfield announced he was stepping down after holding the position for just over a year. Redfield was helping Walmart get through the inflation crisis by working with suppliers to keep prices low. Before being named the chief merchandising officer Redfield was in charge of the U.S. food and grocery business.
Walmart responded via email regarding the Energizer lawsuit with the following: “We take allegations like this seriously and will respond in court as appropriate.”