Affordability Has Permanently Rewired Where Americans Shop — and Walmart Is Capturing That Shift

Walmart now holds 21.2% of total U.S. grocery market share. Kroger, the second-largest grocery retailer in the country, holds 8.9%. That gap is not narrowing. It is widening.

Wave 12 of the Dunnhumby Consumer Trends Tracker, fielded across 8,500 U.S. grocery shoppers in December 2025, found that mass-channel retailers have pulled even with traditional supermarkets in household penetration for the first time since the study launched in 2022, with both channels sitting at 79%. Walmart drove the largest year-over-year penetration gain of any retailer in the study, adding six percentage points to reach more than 190 million Americans monthly, 2.5 times the reach of second-place Dollar General. Dollar stores collectively surged to 42% penetration, surpassing club stores for the first time since August 2023.

These numbers reflect something more consequential than favorable economic timing. They reflect a consumer base whose relationship with affordability has been permanently restructured, and a retailer that has spent the past several years building exactly the kind of infrastructure that earns and keeps traffic when that happens.

Suppliers who have not yet recalibrated their Walmart strategies around this reality are operating on borrowed time.

The Anxiety That Isn’t Going Away

Understanding why this shift is structural rather than cyclical requires sitting with a specific data point. Actual food inflation in December 2025 ran at 2.4%. U.S. consumers believe it is running at 19.6%, more than eight times the real rate. For households earning under $50,000, the perceived rate climbs to 23.6%.

That is not a communications failure that better messaging will fix. It is evidence of financial anxiety that has become durable enough to drive behavior independent of what the data actually says. More than 57% of Dunnhumby survey respondents said they would struggle to cover an unexpected $400 expense. Food insecurity, defined as reducing meal sizes or skipping meals due to financial hardship, affects nearly 40% of Americans between 45 and 54, and one in three families with children.

Numerator’s most recent consumer trends research found that by late 2025, 37% of U.S. consumers cited rising prices as their primary concern, up sharply from mid-year. AlixPartners’ 2026 Global Consumer Outlook identified grocery as the category with the lowest consumer loyalty, where shoppers move fastest for any meaningful price improvement. McKinsey’s ConsumerWise tracking recorded a 16-point swing in U.S. consumer net optimism in the fourth quarter of 2025, a deterioration that cut across income groups.

The through line across all of it: consumers are not behaving as if inflation has moderated, because financially they do not feel that it has. As Dunnhumby’s president of the Americas Matt O’Grady put it, “Shopping behavior doesn’t just snap back.” The mass-channel gains built since 2022 are not a temporary position to be surrendered when conditions ease. They are the new baseline.

A Different Kind of Walmart Customer

What separates this cycle from prior value-migration periods is the income profile of the consumers now driving Walmart’s growth. Roughly 75% of Walmart’s recent market share gains have come from households earning more than $100,000, a demographic that historically treated Walmart as an occasional destination rather than a primary one. CEO Doug McMillon has confirmed this pattern plainly in multiple earnings calls: “Upper- and middle-income households are driving our growth.”

Brick Meets Click data found that Walmart’s affluent customer segment, households earning $200,000 or more, grew nearly five times faster than its overall active user base in the first half of 2024. These shoppers spend 1.5 times more per month than lower-income households and, by all available evidence, are staying. Approximately 80% of new higher-income converts to Walmart have remained with the retailer, many expanding their spending beyond grocery into apparel, home, and health and wellness. E-commerce has been the primary vector: a significant portion of high-income Walmart shoppers never set foot in a store. They use pickup and delivery, and they value the time savings as much as the price.

This matters for every supplier with a Walmart business, in every category. The assumption that Walmart’s shelf is primarily a vehicle for reaching price-sensitive, lower-income shoppers has been functionally incorrect for several years. The brand conversation at Walmart today involves a broader, more demanding, more digitally-engaged consumer than at any prior point. Suppliers whose item positioning, pack architecture, and promotional strategy were designed for a different customer profile are leaving performance on the table.

What Bettergoods Actually Represents

Most supplier conversations about Walmart’s private label focus on Great Value, which is the wrong frame. Great Value competes on price. Bettergoods, launched in April 2024 as Walmart’s most significant private brand food debut in two decades, competes on desirability, and that distinction changes everything about how national brands need to think about the shelf they share with it.

The line launched with more than 300 items across frozen, dairy, snacks, beverages, pasta, soups, coffee, and chocolate, with most priced under $5. But its design intent was explicitly premium. Walmart’s vice president of creative said the goal was to build a brand “as desirable as the leading national brands.” The packaging was designed to stand apart from anything else in Walmart’s private label portfolio. The three product pillars, culinary innovation, plant-based formulations, and made-without positioning, were built to attract the exact consumer that national food brands have spent years cultivating with wellness messaging and clean-label investment.

Numerator’s purchase data from early Bettergoods buyers makes the competitive implication concrete. Bettergoods shoppers are 67% more likely to be Gen Z than Great Value shoppers, three times more likely to have dietary restrictions in the household, and more likely to shop online and spend more per trip. Bettergoods and Target’s Dealworthy were the two fastest-growing private label brands in the country in 2024. Among early adopters, 78% plan to repurchase, and nearly half describe it as better value than the category alternatives.

Bettergoods is not pulling budget shoppers up from Great Value. It is recruiting quality-driven shoppers away from national brands. Walmart now operates a tiered private label architecture in which Great Value holds the price-competitive position and Bettergoods competes on premium desirability, leaving national brands to justify their margin premium against both simultaneously. Suppliers who have not pressure-tested their value proposition against that full private label range, not just on price, but on quality perception, ingredient transparency, and brand appeal, are operating with incomplete intelligence about the shelf they occupy.

The Tariff Pressure That Is Already Here

The consumer behavior shift and the cost structure challenge are not separate stories. They are converging on suppliers from opposite directions at the same time.

When Walmart pulled its first-quarter fiscal 2026 operating income guidance earlier this year, it was a signal the tariff environment was materially disrupting the retailer’s ability to forecast. CEO McMillon subsequently confirmed that Walmart and its suppliers were already absorbing some tariff costs, but that the full impact could not be contained given the magnitude. The retailer’s institutional response has been consistent and documented: negotiate with suppliers for price reductions, expand private label in affected categories, and diversify sourcing away from tariff-exposed supply chains.

Multiple reports from Bloomberg and Reuters confirmed that Walmart was asking some Chinese suppliers to cut costs by as much as 10% per round of tariffs. Some suppliers told reporters that reductions of even 2% to 3% would mean selling at a loss. These negotiations are not limited to Chinese-sourced goods. They have extended across categories and supplier sizes, at a retailer that already runs its cost negotiation posture harder than most.

The pressure point for suppliers is specific. Walmart is managing a consumer who believes prices are far higher than they are and who is making channel and brand decisions accordingly. Any cost increase that flows through to the shelf risks validating that consumer anxiety and accelerating the private label switching behavior the retailer is simultaneously investing in enabling. Walmart’s incentive to absorb as little of the tariff burden as possible and extract as much of it as possible from the supplier base has never been stronger. Suppliers entering 2026 line reviews without a clear tariff exposure analysis and a documented cost mitigation story are not prepared for the conversation they are about to have.

The Data Gap That Decides Who Wins

Walmart has spent the past several years building a first-party data infrastructure that is now a meaningful competitive variable in the supplier relationship, and most suppliers are not using it at the level that the best-performing ones are.

Walmart Luminate, which rebranded to Scintilla in February 2025, gives suppliers access to more than 690 operational metrics spanning transaction data, supply chain performance, shopper behavior, and customer perception surveys. Walmart’s client base for this platform grew 173% compared to 2023. The integration of Scintilla with Walmart Connect, the retailer’s retail media business that generated more than $4.4 billion in revenue in fiscal year 2025, means suppliers can move from insight to activation within a single system. A supplier can identify a customer segment that is trading down, understand the characteristics of that segment, and deploy targeted media against it, all using Walmart’s own closed-loop data.

The suppliers using this capability well are arriving at line review conversations with a fundamentally different quality of argument. Kimberly-Clark used Scintilla to identify in real time that a packaging change to its Cottonelle brand was driving shopper switching to competitor brands and acted on it before the damage compounded. Bimbo Bakeries used survey data from the platform to discover that new customers were drawn to flavored rather than plain bagels, reshaping its assortment recommendations for Walmart buyers. These are not cosmetic uses of a data tool. They are the difference between a supplier that brings Walmart intelligence about its own category and one that brings a sell sheet.

As Walmart’s buyers become more data-fluent, and they are, the gap between suppliers who engage deeply with Scintilla and those who treat it as a compliance exercise will show up in shelf allocation, in promotional support, and eventually in ranging decisions. The platform is not an optional add-on to the Walmart business. It is increasingly the language in which serious conversations about that business are conducted.

What the Buying Patterns Actually Signal

The behavioral details inside Dunnhumby’s Wave 12 data deserve more attention than they have received. Despite sustained financial pressure through 2025, consumers pulled back slightly on aggressive price-seeking during the December holiday period, with shopping at low-price stores declining 2.1 percentage points. What rose was bulk buying, up 1.3 percentage points.

This is not evidence that financial pressure eased. It is evidence that consumer savings behavior has matured from reactive deal-hunting into something more deliberate. McKinsey found that millennials in particular are managing spend by adjusting pack sizes rather than switching brands, preserving brand preference while reducing per-trip outlay. Nearly half of shoppers now redeem coupons through store loyalty programs, up 2.5 percentage points from the prior wave and the largest single behavioral shift Dunnhumby tracked in this edition. Sixty-eight percent seek discounts on items they buy regularly. Sixty-two percent expect strong promotional activity as a baseline condition of doing business, not as a benefit to be earned.

These habits will not reverse when consumer sentiment improves. They have been reinforced by two years of practiced use and are now simply how a large share of Walmart’s shopper base operates. For suppliers, the pack architecture conversation and the promotional calendar conversation are not discretionary topics with Walmart buyers. They are table stakes for demonstrating that the brand understands its own shopper.

The Operating Reality

Walmart’s grocery penetration record is not the product of favorable macro conditions. It is the product of a deliberate accumulation of structural advantages: in price, in physical reach, in e-commerce execution, in private label sophistication, in first-party data depth, and in a buyer relationship culture that consistently redirects cost pressure back through the supply chain. The retailer holds 21% of U.S. grocery market share, reaches 93% of U.S. households with same-day delivery, generates $4.4 billion annually from retail media, and operates a private label program gaining ground at the premium tier simultaneously with the value tier.

The consumer driving all of that is financially anxious across income levels, more promotional in her habits than she was three years ago, more open to private label alternatives than national brand suppliers have historically planned for, and increasingly shopping across Walmart’s in-store and digital channels in ways that blend rather than separate.

Suppliers with strong Walmart businesses have earned them by staying close to that consumer, staying close to Walmart’s data, and staying ahead of the commercial expectations that a retailer operating at this scale will continue to raise. Those who have not yet done that work are not facing a missed opportunity. They are facing a narrowing window to close a gap that is already showing up on the shelf.

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