Walmart is an undisputed titan of the retail industry. With over 11,500 stores worldwide and $559 billion in revenue for fiscal year 2021, Walmart is the largest company in the world by sales[^1]. In the U.S. alone, Walmart operates over 5,000 retail locations and employs 1.6 million associates[^2]. Walmart‘s sheer size and scale is staggering.
But despite Walmart‘s dominance, there is often confusion and debate over how to classify Walmart stores. Is Walmart a supermarket, a supercenter, a department store, or something else entirely? The answer is not always clear cut and depends on the specific type of Walmart store format.
In this comprehensive analysis, we‘ll break down the different types of Walmart stores, compare them to traditional supermarkets, and examine what it all means for shoppers. As a retail industry expert and discerning consumer, I‘ll offer insights and predictions on Walmart‘s grocery strategy and the future of the supermarket business.
Defining Supermarkets, Supercenters, and More
Let‘s start by defining some key terms in the retail world:
Supermarket: A large self-service retail store that primarily sells food and household items, typically laid out with separate departments for produce, meats, dairy, dry goods, etc. Supermarkets carry a wide variety of brands and products within each category[^3]. Examples include Kroger, Albertsons, Publix, etc.
Supercenter: An extremely large retail store that combines a supermarket and a department store under one roof. Supercenters sell a wide range of products including a full line of groceries, clothing, housewares, electronics, toys, and much more. Supercenters are typically over 170,000 square feet in size and may feature services like pharmacies, vision centers, auto centers, restaurants, and more[^4]. Walmart and Meijer are prime examples of the supercenter format.
Department Store: A large retail establishment that sells a wide variety of merchandise, but typically does not have a full grocery section. Department stores are organized into distinct departments like clothing, cosmetics, home furnishings, etc. and are often anchor tenants in shopping malls. Examples include Macy‘s, Kohl‘s, JCPenney, etc.
Discount Store: A retail store that offers a variety of merchandise at low prices in a relatively bare-bones shopping environment, usually with a lower level of customer service than a department store. Discount stores may sell a limited assortment of non-perishable food and groceries, but it is not their main focus. Examples include Dollar General, Big Lots, etc.
As you can see, while these retail formats have some overlap, they each have distinct characteristics. Supermarkets specialize in food and grocery items, while department stores focus on general merchandise. Supercenters combine both, usually in a no-frills environment with low prices.
Walmart‘s Evolving Store Formats
With those definitions in mind, let‘s take a closer look at Walmart‘s different retail formats. Walmart actually operates three main types of stores in the U.S.:
-
Walmart Supercenter: These massive stores are what most people picture when they think of Walmart. Ranging from 70,000 to 260,000 square feet, supercenters sell a full line of groceries along with a huge assortment of general merchandise like clothing, electronics, toys, home goods, and much more. Supercenters also house ancillary services like vision centers, pharmacies, auto centers, hair salons, and more. As of 2021, there are 3,570 Walmart Supercenters in the U.S.[^2]
-
Walmart Discount Store: Also known as "traditional Walmart" stores, these locations preceded the supercenter format. They are smaller stores ranging from 30,000 to 220,000 square feet and sell a more limited selection of groceries and general merchandise. Over the years, most discount stores have been converted into supercenters, and as of 2021, only 374 remain[^2].
-
Walmart Neighborhood Market: Launched in 1998, Neighborhood Markets are Walmart‘s chain of grocery stores that focus primarily on food and pharmacy services. They are much smaller than supercenters, ranging from 12,000 to 66,000 square feet, and sell a more limited assortment of household goods and pet supplies in addition to groceries[^5]. There are approximately 800 Neighborhood Markets as of 2021[^2].
Here is a comparison chart that summarizes the key characteristics of Walmart‘s different store formats:
| Format | Size Range (sq. ft.) | Primary Merchandise Mix | Number of Stores (U.S.) |
|---|---|---|---|
| Walmart Supercenter | 70,000 – 260,000 | Full grocery, general merchandise, services | 3,570 |
| Walmart Discount Store | 30,000 – 220,000 | Limited grocery, general merchandise | 374 |
| Neighborhood Market | 12,000 – 66,000 | Primarily grocery and pharmacy, limited general merchandise | ~800 |
As the data shows, supercenters are by far Walmart‘s dominant format, while discount stores have dwindled and Neighborhood Markets remain a relatively small piece of the pie.
So, to answer the original question – Walmart Supercenters and discount stores are certainly NOT traditional supermarkets. They are far larger and sell a much wider range of products beyond groceries. Walmart Neighborhood Markets, on the other hand, do fit the definition of a conventional supermarket.
How Walmart‘s Grocery Business Stacks Up
Although groceries account for more than half of Walmart‘s U.S. sales[^6], the company actually has a relatively small share of the total grocery market compared to its share of general merchandise retail.
As of 2021, Walmart controls about 26% of the U.S. grocery market, behind Kroger at 29% share[^7]. Other major players in the grocery space include Albertsons/Safeway, Ahold Delhaize (owner of Food Lion, Giant, Stop & Shop), and Publix.
In terms of grocery sales, Walmart is neck-and-neck with Kroger. In 2020, Kroger had grocery sales of $132 billion versus Walmart‘s $129 billion[^8]. However, most of Kroger‘s sales come from groceries, while Walmart‘s sales are split between grocery and general merchandise.
Compared to traditional supermarket chains that specialize in groceries, Walmart faces some challenges in terms of quality, selection, and freshness perceptions. Consumer surveys consistently rank regional grocers like Wegmans, Trader Joe‘s, and Publix ahead of Walmart in terms of the overall grocery shopping experience[^9].
Even as the largest grocer in the country, Walmart is somewhat constrained by its supercenter model when it comes to groceries. Supermarkets can optimize their entire store for the food shopping experience, while Walmart has to balance groceries with its vast array of general merchandise. This is likely why Walmart developed the Neighborhood Market concept to compliment its supercenters and compete more directly with grocery stores.
The E-Commerce Imperative
Of course, no discussion of Walmart‘s retail strategy is complete without mentioning the seismic shift to e-commerce. With the rise of Amazon and online shopping, Walmart has been forced to make massive investments in its digital business to stay competitive.
Walmart is now the second-largest online retailer in the U.S. behind Amazon, with $64 billion in e-commerce sales in 2020[^10]. Walmart has aggressively expanded its online grocery business with curbside pickup, delivery, and in-store pickup towers. As of early 2021, Walmart offers grocery pickup at 3,750 locations and same-day delivery from 3,000 stores[^11].
This omnichannel approach that integrates Walmart‘s vast store network with digital capabilities is transforming the grocery shopping experience. Customers can now order groceries online and have them delivered or pick them up curbside without ever entering the store.
The COVID-19 pandemic has dramatically accelerated adoption of online grocery shopping. Walmart‘s U.S. e-commerce sales grew 79% in fiscal 2021[^1], driven in large part by grocery pickup and delivery. Going forward, seamless integration of in-store and online shopping will be table stakes for grocers.
The Future of Walmart and Supermarkets
As a shopper, I‘ve experienced firsthand how Walmart is blurring the lines between retail channels. I can go to Walmart.com, order groceries and household essentials, and have them ready for curbside pickup in a few hours. The breadth of Walmart‘s selection and the convenience of curbside pickup is a compelling value proposition.
At the same time, I still appreciate the specialized experience of a well-merchandised supermarket with high-quality fresh foods, attentive service, and unique private label products. I‘m willing to pay a bit of a premium at a Wegmans or Trader Joe‘s for that differentiated experience.
Looking ahead, I believe Walmart will continue to lean into its strengths as an omnichannel retailer with unrivaled scale and logistical capabilities. The Neighborhood Market format will likely grow as Walmart looks to gain share in the $800+ billion U.S. grocery industry[^7].
Walmart‘s investments in grocery pickup, delivery, micro-fulfillment centers, and inventory management technology will make them a formidable competitor to Amazon and traditional supermarkets alike. The company‘s new Walmart+ membership program, which offers free grocery delivery, fuel discounts, and other perks[^12], is another example of how Walmart is innovating to win share across retail channels.
However, I don‘t expect Walmart to completely dominate the grocery market like they have other retail sectors. Grocery is simply too big and too fragmented, with well-established regional players, specialty formats, and strong consumer lifestyle affiliations.
Instead, I foresee a hybrid future where consumers split their grocery shopping between a primary store like Walmart or Kroger, a favorite specialty store (Trader Joe‘s, Whole Foods, etc.), and online providers based on convenience and specific needs. Walmart will certainly get its share, but won‘t monopolize.
The Bottom Line
Whether you consider Walmart a supermarket or not is somewhat beside the point. It‘s more important to understand how Walmart is strategically positioning itself in the grocery market with different store formats and e-commerce capabilities.
As a shopper, you now have more grocery options than ever before, from supercenters to neighborhood markets to online delivery. It‘s up to you to choose the right mix of retailers that deliver the best combination of price, quality, convenience, and experience.
One thing I can predict with confidence: with its massive scale and constant innovation, Walmart will continue to shape the future of the grocery business in ways we can only imagine. The retail giant may defy neat categorization, but its impact is undeniable.
[^1]: Walmart 2021 Annual Report – https://stock.walmart.com/investors/financial-information/annual-reports-and-proxies/default.aspx[^2]: Walmart Unit Counts By State – https://corporate.walmart.com/our-story/our-locations#/united-states
[^3]: Supermarket Definition – Merriam Webster Dictionary – https://www.merriam-webster.com/dictionary/supermarket
[^4]: Supercenter Retail Definition – ICSC – https://www.icsc.com/uploads/t07-subpage/ICSC-US-Shopping-Center-Definition-Standard.pdf
[^5]: Walmart Neighborhood Market Overview – https://corporate.walmart.com/our-story/our-business/international/walmart-neighborhood-market
[^6]: What Drives Walmart‘s Success – Investopedia – https://www.investopedia.com/articles/markets/120914/what-drives-walmarts-success.asp
[^7]: Kroger Leads in Overall Grocery Market Share – Supermarket News – https://www.supermarketnews.com/retail-financial/kroger-leads-overall-grocery-market-share-walmart-tops-food-sales
[^8]: Top 50 Grocers By Sales – Progressive Grocer – https://progressivegrocer.com/top-50-grocers-2020
[^9]: America‘s Best Supermarkets 2021 – USA Today/10Best – https://www.10best.com/awards/travel/best-supermarket/
[^10]: Amazon & Walmart Dominate E-Commerce – eMarketer – https://www.emarketer.com/content/amazon-continues-dominate-us-ecommerce-2021
[^11]: Walmart Expands Online Grocery to 3000+ Stores – Retail Wire – https://retailwire.com/discussion/walmart-will-expand-grocery-delivery-to-3000-stores/
[^12]: Walmart+ Overview – https://www.walmart.com/plus
