NEWSLETTER
It's no secret that retail has changed quite a bit since your parents (or even your grandparents) went shopping a few decades ago.
In the mid-20th century, for example, most stores were highly specialized and only sold products in a few categories. Customers typically went to the butcher for their meat and to the produce market for their produce. There may have only been a handful of stores in the city where you could buy clothes, and if you had a hole in your shoes, you had to visit a specialist to have it repaired.
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A couple of decades later, around the 1980s, shopping malls became fashionable. Suddenly, you could purchase a variety of products for less money and effort. Those old shoes you needed to fix were suddenly replaceable with a shiny new pair. And while you were at the mall, you could buy a new pair of jeans, a soft pretzel, and maybe even a couch.
At a macro level, retail has largely condensed over the years. Customers tend to prefer convenience and price over quality. Generally speaking, it is no longer necessary to save up and buy something that could last 35 years. The products are cheaper and easier to obtain. And many of them often come from a handful of giant retail corporations.
Image source: Joe Raedle/Getty Images
Trends continue to change the way we shop
Now, of course, it is no longer fashionable (or even the most convenient) to buy what you need in a large shopping center. A trip to the mall usually involves getting dressed, getting in your car, competing for a parking spot, and going in person to various stores to purchase your products.
Instead, many of us prefer to shop online from the comfort of our homes. If we go in person, it'll probably be to one of the few big retailers that sells everything we need under one roof, like Walmart. (WMT) o Objective (TGT) .
This trend was greatly accelerated by COVD-19, which put many small specialty retailers out of business and allowed larger players to snap up potential competitors before they became actual competitors.
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One shopping trip that many of us continue to take in person is the regular trip to the grocery store. As much as they try to crack the code online, giants like amazon (AMZN) They simply haven't been able to capture as much market share as they would like. The bottom line is that many of us still prefer to choose our own produce and packaged goods.
Walmart could take a greater market share
That's good news for large corporations that are already well established in the brick-and-mortar sector. Both Target and Walmart have strong grocery departments that continue to grow thanks to their proximity to millions of customers and the availability of trusted brands.
Walmart has its sights especially set on groceries for next year. In 2024, the retail giant announced it would roll back the prices of many food products to pre-inflation levels. This came in part as other giants like amazon began to nip at its heels, although Walmart remains the number one supermarket in the United States.
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“We have a very high-quality product offering for people, and that invites them to participate,” Walmart Chief Financial Officer John David Rainey said in an interview in early January. “It's a much wider variety than we've had historically.”
Walmart has been vocal about its efforts to make the shopping experience in its stores more pleasant. It has spent $9 billion to renovate and improve many of its stores, and in 2024 announced that it would open 150 new stores (either renovated existing locations or new stores) over the next five years. The food sector is one of the biggest beneficiaries of these improvements.
Walmart is also increasing its private label offerings, making many options more gourmet or health conscious to attract more consumers.
“It's a lot broader and attracts a lot more customers and members,” Rainey said, adding that “the quality is very different than what we've seen historically.”
Walmart's ambitions to improve and increase its grocery selection come at a very welcome time. Food is becoming more expensive, so more consumers are choosing to shop at price-conscious retailers with reliable quality.
Rainey added that a third of Walmart customers are choosing to pay more for fast grocery delivery, hinting that this offering is also increasing rapidly.
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