In this article, we will see Why Is Walmart Milk So Cheap?
Introduction to Walmart
Walmart Inc. is an American-based grocery store founded in 1962 by Sam Walton. The company is headquartered in the United States. The company from that year grew much, and with its growth, tried to sell many new products. Some products became a successful hit, and some failed drastically. To date, Walmart is so accepted by the customers that they have opened around 10,524 retail stores in 24 countries.
Walmart, a retail company whose net worth now is about 328 billion dollars, sells almost every item that a customer can imagine. Apart from selling retail goods, Walmart provides photo service, pharmacy services, financial services, including credit cards, debit cards, money transfers, and much more. Walmart also sells all types of dairy products, which also include Milk.
According to the statistics, milk consumption of Americans has decreased and now settled at 43%; even then, Milk remains a product widely purchased from Walmart. The Milk at Walmart is considerably cheaper than any other retail store, and this is due to various reasons. Walmart also has its milk processing plants, which gives them more authority to regulate milk prices, which Walmart has chosen to sell cheaper. Walmart has to compete with the largest dairy industry in the United States to offer Milk at more affordable prices. Walmart has become so vast in terms of business and the services it provides, so it has the power to sell things cheap even handle the loss in a particular segment, as another segment at Walmart gives main business to the company.
Affordable Milk
Milk is the first and the principal ingredient of breakfast in America and many other parts of the world. The compulsory daily consumption of Milk at times becomes costlier to many customers. Walmart started its dairy processing plant in 2016, which made dairy products cheaper, and Walmart is the only regulatory authority of the Milk. The products include standard mil, skim Milk, and chocolate milk produced by the company itself. The affordable Milk is because of many farms acquired by Walmart in Indiana and Michigan.
Reason To Sell Cheap Milk
It is well known that selling Milk is not the area for Walmart retailers, and it is the grocery store that the customers most widely used. The strategy to sell cheap Milk will draw more and more consumers towards the store in the early mornings. Customers going in the morning to purchase Milk will also make them buy many more things, as it is human nature that a customer enters Walmart and doesn’t purchase any other products.
This strategy allows Walmart to even sell the Milk in loss, which allows more and more customers to come to the store and spend more money. Moreover, customers, rather than going for highly-priced organic Milk at Whole Foods Inc. and other stores, opt to choose Walmart, as the staple product is used daily. It becomes challenging for the customers to choose highly-priced Milk daily. Walmart has studied the scenario well and started selling the cheaper Milk.
Competition
Walmart has many competitors in the retail market, but there are very few in the segment of milk selling. Target and Whole Foods Inc. are the two major retail stores consumers prefer for dairy products, especially Milk. Walmart has managed to keep its Milk even cheaper than the competitors.
As Walmart also has to compete with many new eating habits taught to the consumer, it has entered the business of soy milk and almond milk. These dairy products, which are an alternative to Milk-based products for vegan consumers, are also offered by Walmart at a much lower price than any other competition.
New Milk Processing Plants
The strategy worked so well for Walmart that the Milk at Walmart will remain cheaper than any other grocery store. Walmart has acquired farms from many farmers in India and Michigan for the new facility. The other leader in the market, like Dean Foods, faced so much trouble because of the new plant being set up. Walmart holds the subsidiary of the brand Great Value, under which every dairy product is labeled.
Conclusion
Walmart is one of the biggest retail stores operated worldwide. The company sells Milk at a much cheaper than expected price, even at times comfortable in making losses in the milk segment. The only reason Walmart is inclined to sell cheaper Milk is to grab the customers. Milk is a staple diet consumed by most consumers, and seeing cheaper Milk will attract the customers. Under, a study found that customers tend to spend more on grocery items and non-dairy products than on Milk.
Frequently Asked Questions
- Who manufactures Milk for Walmart?
Indiana and Michigan are the excellent milk processing facility under the brand name Great Value, from where the majority of Milk is supplied.
- Does Walmart sell Milk at a loss?
Yes, Walmart sells the Milk at a loss, as purchases on another segment cover the loss.
- Does Walmart sell organic Milk?
Yes, Walmart also sells organic Milk; one of these is Horizon Organic Vitamin D milk.
