Skip to main content

Walmart tries to beef up its grocery business by selling ready meals

| International retailers

Walmart will start offering prepared meals at its stores for the first time, a move that could help the USA’s biggest grocer sell more food while siphoning customers from restaurant chains.

Ten different meals are now available in 250 stores, and the programme will expand to 2,000 locations by the end of 2018, Walmart executives said in an interview. The company also is introducing four $15 meal-kit options in stores, expanding a business that had previously only been offered online through outside vendors.

"More than 80% of Americans don’t know what they will have for dinner tonight," said Tyler Lehr, a Walmart senior vice-president. Scrambling to find a meal "puts pressure on a family", he said.

The move is the latest step to improve Walmart’s grocery business, the chain’s biggest source of revenue. It has upgraded its beef to certified Angus, cultivated a sweeter variety of cantaloupe that can be sold year-round, and recently developed a better way to track the freshness of fruits and vegetables as they travel from farms to its shelves.

The company also is looking to ward off competitors on multiple fronts, including Amazon.com, German discounter Aldi and meal-kit purveyor Blue Apron Holdings.

Prices of the prepared meals will range from $8 to $10, and varieties include pot roast with mashed potatoes and chicken enchiladas.

Restaurant threat

Given the massive scope of Walmart’s grocery business, the meals could depress sales at restaurant chains. Shoppers may choose to grab a quick and cheap dinner from Walmart instead of dining out.

It’s not good timing for the dining industry. Sales growth at the nation’s top 500 restaurants has slowed for two straight years, according to research firm Technomic, while growth at full-service chains like Olive Garden and Chili’s went from 4.7% in 2015 to flat in 2017.

For Walmart, the meal push also may let it get more out of its deli section. Nearly all supermarket chains have such departments, yet only 12% of shoppers regularly visit that part of the store, according to data tracker Nielsen Homescan. Higher-income households are 20% more likely to purchase deli items, Nielsen and the Food Marketing Institute found.

It is increasingly common practice for supermarkets to offer prepared meals, but Walmart held off until it could find the right approach, Lehr said. The meals, which were developed internally in about two months at the company’s culinary innovation centre, have a shelf life of three days.

"It’s no big secret that they are offered in other retailers, and we have looked at them previously, but we were not thrilled with quality levels," he said. "We were not going to make a move in this space until we were comfortable."

Bloomberg

Pin It

Related Articles

Spar reports growth of 3.3% as global retail sa...

SPAR, the world’s largest food retail voluntary chain, has seen annual retail sales break the €40 billion mark for the first time, today reporting global sales revenue of €41.2 billion for the year ending December 31st, 2021. The figures represent...

Informal Retail in Africa: Could Technology be ...

Since the turn of the century and consistently for nearly a decade before the COVID-19 pandemic ravished global markets, Africa was home to the fastest growing economies. The shoots of positive growth it demonstrated afforded it the title of the “...

Consumers need a good reason to shop this Black...

Last year’s Black Friday retail sales massively underperformed for many reasons, according to Marino Sigalas, Account Director at The MediaShop. He says that some consumers were not comfortable with the thought of being shoulder to shoulder with o...

Checkers launches deals onto its Sixty60 home d...

Retailer Checkers says that customers using its Sixty60 home delivery service will now be able to benefit from its Xtra Savings rewards programme.

SA wipe manufacturer Sani-touch is ahead of the...

In the UK a government minister is calling for a new law to ban wet wipes that contain plastic. Labour minister Fleur Anderson argues that around 90% of the 11 billion wet wipes used in the UK per year contain some form of plastic that turns into ...