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Wal-Mart Gaining On Grocery Chains

Cash-strapped consumers turning to Wal-Mart for groceries, drugs

June 3, 2008

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Sky-high gas prices are hurting most retailers, allowing Wal-Mart to chip away at grocery and pharmacy chains as consumers look for lower prices and try to consolidate their shopping trips.

A study conducted by the consumer research firm BIGresearch finds that Wal-Mart is maintaining its No. 1 spot among all adults nationwide, with 16% saying that Wal-Mart is the store they shop most frequently, while regional chains are losing ground.

"Across the country people are cutting costs, and Wal-Mart's competitive pricing model is attractive to shoppers," the report says, noting that shoppers seem to be consolidating shopping trips, which is boosting Wal-Mart's share of prescription drug sales, as well.

Walgreens still holds the top spot in drug sales, with a 17.3% market share in May, followed by CVS, with 13.2%. But No. 3 Wal-Mart is gaining rapidly, with a total share of 13.1%.

The same pattern can be seen in grocery shopping.

In the Northeast, 9.5% of shoppers say they shop most often at Shop-Rite, a marginal increase, and Stop 'n' Shop stayed flat, while Wal-Mart showed considerable growth in that region.

On the West Coast, Safeway continues to be the most shopped-at store, and its growth is level; Wal-Mart, in the No. 2 slot in that region, is gaining ground.

In the South, Wal-Mart continues to be the powerhouse, where 25% of adults name it as their preferred grocery store, and in the Midwest, it's also tops, favored by 14.9% of shoppers.

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