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August 14, 2025
Will Walmart’s Employee Discount Expansion Spur Competitors To Follow Suit?
Walmart recently announced that it would be expanding its 10% employee discount to include groceries year-round, rather than its previous restriction of curtailing the offering to strictly the holiday season. The previous discount, while it did include fresh produce and general merchandise, did not allow for a year-round discount on dairy, frozen foods, dry grocery goods or pantry staples, dairy, meat, or seafood.
In a letter sent to Walmart employees and shared with Quartz, chief people officer Donna Morris indicated that requests concerning this sort of expanded discount had been among the most frequent received by the blue-and-yellow brand.
“We’ve heard your feedback that these savings make a real difference for you and your families. And we have continued to hear that you would like to see this benefit expanded,” Morris wrote.
Kroger, for its part, offers a 10% discount on its private label food products (but nothing in broader grocery terms). Aldi does not offer an employee discount (although it offers other benefits), and neither does warehouse club Costco. Sam’s Club, owned by Walmart, currently offers a similar 10% discount on produce and expanded holiday discounts. It remains unclear whether Walmart will expand Sam’s Club employee discounts in a matching fashion, as yet.
Target, however, offers a flat 10% discount to employees, alongside a further 20% discount on fresh and frozen produce and the organic versions of its Good & Gather food products. Albertsons gives employees a 5% discount on groceries writ large, or 10% off its store branded products.
Evidence of Praise for Walmart’s Expanded Employee Discount
With several competitors offering lesser or more strict employee discounts concerning the broader grocery category, and with Walmart being recognized a low-price leader more generally, its expanded employee discount could be perceived as comparatively generous.
In a LinkedIn post made by Kieran Shanahan, COO and EVP for Walmart U.S., the majority of commenters registered praise for the move, implying it would be great for associates — and retention of the same. The post attracted ~1,400 positive reactions and just two negative reactions.
“Really proud of the company and our leadership today. This discount will be great for our associates,” Walmart store manager Lance Swint said in response to Shanahan’s share.
Some criticisms were present, however, with user David Bippes calling instead for a livable minimum wage being set by the retail giant, and user Michael Freeman endorsing the move (as long as it didn’t come at the cost of jobs). A third commenter, Michael Smith, said that while this seemed like good news, the planned 10% employee discount on grocery would do little to offset the substantially larger price hikes resulting from ongoing tariffs.
Discussion Questions
Given Walmart’s market positioning and reputation, will this significant expansion of its employee discount concerning grocery force competitors to up their game? Why or why not?
Will this change have any appreciable effect on employee retention?
Does Walmart’s scale allow it to make this move more easily than competitors, especially smaller ones, given traditional margins in grocery?
Poll
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Paula Rosenblum
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Bob Amster
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Mark Ryski
Founder, CEO & Author, HeadCount Corporation
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This is a solid additional benefit for Walmart workers. In some ways it brings Walmart into line with other retailers which have more generous discount packages. That is necessary as Walmart wants to recruit and retain talented people. Of course, there will still be carping from some over total compensation at Walmart.
I find this question rather pointless: maybe it will, maybe it won’t, but – as some of the critics implied – overall compensation is far more important that what particular perks are included in it…WalMart’s raising – or not- of their wage scale is far more likely to spur reaction.
The move is brilliant. It recognizes that inflation is gonna happen. This may not cover all of it, but it should give employees a sense of security. Competitors may not think they can afford to do it. That’s not gonna help customer service much
I applaud this move by Walmart. They’re using their tremendous cost leverage to benefit their employees at a time when employees really need it. While the other competitors may feel compelled to match or enhance benefits for their employees, I doubt that the competitive response was Walmart’s primary concern. Any time the company – Walmart, or otherwise – provides a new, meaningful benefit for employees, there has to be some positive impact on retention and employee morale. There’s little doubt that Walmart scale and financial success have enabled them to offer this, but this was still a choice – Walmart leadership made the right one.
It’s good PR for the company, it’s good cost-savings for the associates, it drives sales, and it creates more loyalty for the associates to actually shop at the store they work at, vs a lower-priced competitor like Aldi. A win-win-win-win.
I like this perk for Walmart employees. This quote from Donna Morris in the article sums it up nicely:
“We’ve heard your feedback that these savings make a real difference for you and your families. And we have continued to hear that you would like to see this benefit expanded.”
If the employees like the perk/discount, then it will help with job attraction and retention. A 10% discount on groceries for the family adds up quickly.
It is possible that competitors may feel pressured to enhance their own employee benefits in order to retain talent and attract new employees. A company such as Target or Kroger might increase its discount offerings or introduce new employee perks in order to remain competitive. Retailers’ financial strategies and market positioning will, however, determine the response.
So far, Target has cut its in-store employee hours. No perk there.
Walmart’s core competence is world-class operations, which enable a sustained low-cost strategy. Walmart’s grocery discount expansion leverages that core strength into a moat-building disguised as an employee benefit.
Walmart is addressing three key business challenges simultaneously. First, the employee retention math: A 10% grocery discount for a household spending $150 weekly equals $780 annually (after tax)—meaningful money that doesn’t show up on competitor salary benchmarking tools. Second, the closed-loop strategy: drives associate loyalty to shop where they work. Third, Walmart’s unique scale: Supply chain efficiencies create a margin cushion that competitors lack. They’re weaponizing their operational excellence.
Blanket matching won’t work. The winners will find benefit structures that leverage their own unique strengths rather than copying Walmart’s playbook. To uncover strategic opportunities, competitors should be asking, “What employee benefit best showcases our differentiation?” There’s no winning against Walmart if you play by its rules.
I love this perk for Walmart employees. It shows that the company listens to team members and provides added support where it can. This will be a solid component in employee retention, and a strong recruiting tool as well.
The answer lies in the culture of each individual retailer. Some retailers have generous employee discount propositions. Some have poor employee discounts. Some care about attraction and retention (including Walmart), and to some others it is not a perceived need, or don’t want to spend on it. To the extent that retailers foresee a competitive labor market, they will have to up their game. If labor is not an issue, some remain or return to being blind or frugal.
This is another example of Walmart taking care of its team members in meaningful ways. Since Covid, the company has introduced a number of very substantial benefits for its store teams: increasing their wages, expanding full-time positions in stores, expanding access to benefits, and expanding their scholarship programs, to name a few.
I believe this absolutely helps Walmart retain its team members and reduce store churn. This in turn, reduces operating expense and allows Walmart to be more efficient in everyday store operations. No small thing.
I do not think this will cause any great revolution in the retail, grocery otherwise. Retailers have always been reluctant to adapt their employee compensation and benefits programs to match the competition.