As Walmart is observing a reduction in customers’ grocery expenses due to the use of appetite-suppressing medications, Amazon is exploring opportunities with third-party grocery providers to enhance its presence in the grocery market.
These actions come as both retailers, like everyone else, grapple not only with inflation but also with how it is influencing consumers’ spending decisions. Some shoppers are choosing to allocate their money toward methods of consuming less food, while others are seeking grocers that offer the best value.
In October, Walmart reportedly discovered a correlation between customers purchasing appetite-suppressing medications, such as the diabetes drug Ozempic, and a decrease in their food purchases. According to PYMNTS, the retail giant was examining anonymized data from shopper populations to discern shifts in sales patterns between individuals using the drug and those who are not.
“We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket,” said John Furner, president and CEO of Walmart U.S., in statement to Bloomberg.
Walmart sells GLP-1 drugs like Ozempic through its pharmacies, and the company has experienced a substantial revenue increase from these medication sales, as indicated in the report. Industrywide, sales of such drugs have tripled since 2020.
The popularity of medications like Ozempic has prompted discussions among CEOs and investors about their potential impact on the economy. For instance, Kellanova CEO Steve Cahillane, whose company produces Pringles and Cheez-Its, mentioned that the firm is studying the influence of these medications on consumer purchasing behaviors, treating it as they would any other trend affecting their business.
Read more: Why Walmart Grocery Sales Are at Risk
At the same time, Amazon is seeking avenues to increase its presence in the grocery sector, focusing on third-party collaborations, exemplified by its partnership with Weis Markets.
Last month, the eCommerce behemoth announced a collaboration with Weis Markets, enabling the availability of the grocer’s products on its platform and facilitating same-day delivery through its extensive distribution network. Reports suggest that Amazon is pursuing similar arrangements with additional third-party retailers.
The delivery service offered by Weis Markets encompasses cities in New Jersey, Virginia, Pennsylvania and Maryland.
“Our goal is to build a best-in-class grocery shopping experience — whether shopping in-store or online — where Amazon is the first choice for selection, value and convenience,” Amazon said in a statement. “As part of that, we’re teaming up with third-party retailers we know our customers already love, like Weis Markets, to offer more selection at great prices and delivery directly from our website.”
Weis Markets is highlighting its collaboration through a temporary promotion, providing complimentary delivery for all orders exceeding $10. Additionally, Amazon has integrated its loyalty program with Weis Rewards, extending exclusive deals to customers who buy groceries from Weis through Amazon’s platform.
Last month, Amazon broadened its grocery delivery and pickup program to include shoppers who are not subscribed to Prime.
The retail giant made grocery delivery and free pickup available to all customers in any U.S. city or town where its Amazon Fresh grocery stores were accessible to Prime members. The service was formerly exclusive to Prime members.
Moreover, Amazon announced that customers were now able to receive deliveries from local grocery and specialty retailers featured on Amazon.com, such as Bristol Farms, Cardenas Markets, Pet Food Express, Weis Markets, and Save Mart.
Meanwhile, CNBC reported Thursday (Dec. 7), that Amazon is testing a new grocery subscription service that allows Prime members to pay a separate monthly fee for unlimited grocery delivery on certain orders. The trial service will be available to Prime members in Denver, Sacramento and Columbus, Ohio.