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Walmart It’s working to lower the cost of the subscription service for Americans who receive food stamps and some other types of government assistance, as it pushes to grow the program and notes more price sensitivity among shoppers.
The nation’s largest retailer said Thursday it will cut the price of Walmart+ in half for low-income households. Starting July 20, customers who qualify for eligible government assistance can pay $49 annually or $6.47 on a monthly basis for Walmart+. That compares to the usual price of $98 annually or $12.95 if members pay monthly.
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For Walmart, the move could help capture and retain a group of shoppers who might be quicker to skip or cancel services with recurring fees or turn to another retailer like the Dollar Store. Walmart didn’t disclose total Walmart+ subscribers but said about a quarter of its members get government assistance. It declined to disclose how that compares to the rest of its customer base.
On Walmart’s most recent earnings call in May, CEO Doug McMillon said customers are feeling the burden of higher grocery bills. He described persistent inflation, especially in food, as “one of the main factors creating uncertainty for us in the second half of the year.”
Many families who struggle to afford groceries also receive less generosity Benefits of the Supplemental Nutrition Assistance Program, formerly known as food stamps, after emergency funding related to the pandemic expired earlier this year.
Walmart’s discounted price could put Walmart+ within reach of more shoppers if they’re willing to pay the fees. More than 41 million Americans will receive food funding through SNAP in 2022, according to the USDA. This number does not include people who receive another type of government aid that may qualify for the discount. Most of the types of aid on the list, such as Medicaid and the National School Lunch Program, help families with children or those experiencing food insecurity.
Walmart launched Walmart+ in 2020 to attract shoppers and make them more likely to spend more on its website and in stores. It is similar to Amazon Prime and follows the playbook for membership-based repositories, such as Costco and Walmart-owned Sam’s Club.
Walmart+ members get free shipping, discounts on fuel, access to the Paramount+ live streaming service, and unlimited delivery on online orders of $35 or more from the store to their doorstep.
The program appears to be gaining some traction, but Walmart is still looking for ways to increase its uptake as it lags behind Prime. Its membership is about 12 million, estimates market researcher Consumer Intelligence Research Partners, based on quarterly consumer surveys and industry research.
Others tie the count higher. In a recent estimate, Morgan Stanley said Walmart+ has reached nearly 21.5 million members, or roughly 17% of household penetration in the U.S.
However, both numbers are only a fraction of the estimated 170 million Amazon Prime memberships in the US, according to CIRP.
Amazon has similar reduced fees for low-income families who qualify for government assistance and subscribe to Prime. It charges $6.99 per month, instead of $14.99 per month. He started drawing less in 2017.
Along with the discounted Walmart+ price, Walmart said it has made it easier for families receiving food aid to shop online. She said she now accepts SNAP online in all 50 states. SNAP-eligible customers can add their benefits card to their Walmart app or website, so they can buy groceries online or use curbside delivery.
Amazon accepts SNAP in every state except Alaska.
For Walmart, expanding Walmart+’s subscriber base comes with other benefits. Not only do monthly and annual fees provide a revenue stream, but the software allows the retailer to better understand customers’ preferences and purchases.
It can use these insights to support its analytics tool, Walmart Luminate, which it sells to customers, or support its growing advertising business, Walmart Connect.
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