This Walmart rival is gaining ground in the pricing game
Amazon Fresh stood out among grocers for dramatically cutting prices, according to Telsey Group report
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While Walmart is still seen as the price leader in the grocery industry, its rivals aren't far behind.
In a recent report, Telsey Group analyzed online grocery prices across seven retailers including Walmart, Target, Amazon Fresh, Kroger (King Soopers), Albertsons (Safeway), Sprouts and Whole Foods (via Amazon) in Denver. Analysts specifically looked into 40 key items across two categories, including "several premium items."
Telsey Advisory Group Senior Managing Director Joe Feldman told FOX Business that Kroger and Target, which usually trade off in the number two spot, have slightly "narrowed the gap with Walmart" and are less of a price premium to the Arkansas-based retailer than they used to be.
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In June 2023, Target and Kroger were at a 14% to 15% premium to Walmart. Today, that figure is sitting around 6% to 7%.
People walk past an Amazon Fresh supermarket in London. (Davide Bonaldo/SOPA Images/LightRocket via Getty Images / Getty Images)
However, what's even more interesting, according to Feldman, is the price drop at Amazon Fresh.
A year ago, Amazon Fresh was 26% more expensive than Walmart. Today, it's just 7.5% more expensive, underscoring how they've been working pretty aggressively to get their prices down, according to the exec.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 70.04 | +1.80 | +2.64% |
| AMZN | AMAZON.COM INC. | 200.00 | +2.41 | +1.22% |
Consumer package goods (CPG) companies are taking on some of the costs to help with those price cuts, according to Feldman, who noted that is good news for the consumer.
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With these CPG companies helping to drive down prices, major grocers "are able to really be aggressive and, you know, price competitively for the consumer."
A Walmart location is seen in Chicago on April 12, 2023. (Christopher Dilts/Bloomberg via Getty Images / Getty Images)
Food-at-home prices, otherwise known as groceries, are still about 20% higher than in 2019. However, overall inflation has dropped significantly from the highs seen in 2022.
In May, the cost of food rose only slightly, up 0.1% over the course of the month, and grocery prices were unchanged.
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Grocery prices are one of the biggest reminders of household inflation, alongside gas prices.
Those "are the two things that they look at most. And they see it, you know, every day [or] every few days. And when those prices start to moderate, the consumer can feel a lot better about how things are going," Feldman said.