The Fee That Is Not a PriceNarrow moat

Walmart (WMT) — moat facet

Membership converts Walmart's weakest asset — a customer relationship with no commitment in it — into something measurable.

Membership and other income was $6,750 million in fiscal 2026, against $5,488 million two years earlier1. It is the smallest of Walmart's revenue lines and the one that behaves least like retailing.

Membership and other income ($bn), fiscal years$5.49bnFY2024$6.45bnFY2025$6.75bnFY2026Growing more than twice as fast as net sales; Walmart+ fee revenue drove most of the increase.
The only line in Walmart's accounts that measures a customer who has committed to anything — and the mechanism that turns 280 million weekly visits into a relationship.

Two programmes sit inside it. Sam's Club charges an annual fee in the warehouse-club tradition, and on that side of the house Walmart competes directly with the best subscription business in retail. Walmart+ is the newer and more interesting one: an annual membership giving unlimited delivery with no order minimum, delivery from store, fuel discounts, mobile Scan & Go and additional benefits2.

The strategic purpose is not the fee. It is what the fee does to behaviour. A household that has prepaid for delivery orders more often, consolidates more of its spending, and stops comparing prices at the margin, because the cost of the alternative now includes a delivery charge it has already avoided. Membership converts Walmart's weakest asset — a customer relationship with no commitment in it — into something measurable.

The evidence that it is working is indirect, because Walmart does not publish a member count. Membership fee revenue grew 17% globally in the June 2026 quarter, with Walmart+ net additions at a record second-quarter high and Sam's Club fee revenue up 6%3; the company credits double-digit growth in Walmart+ fees for most of the increase in membership income over the past two years4.

The absence of a member number is itself telling: a company with Costco's renewal rate would report it.

Compare membership and other income growth with net sales growth. It was 15.6% against 5.9% in the June quarter5. That gap is the subscription business forming.

Moat trajectory: Widening

Membership fee revenue grew 17% globally in the June quarter with a record second-quarter high for Walmart+ additions, and membership and other income has grown from $5,488 million to $6,750 million in two years. Walmart converts a small fraction of 280 million weekly customers into members; the room left is the reason this is widening.

The number that tests this moat
Reported
Membership fee revenue growth
+17% globally

With a record second-quarter high for Walmart+ net additions and Sam's Club fee revenue up 6%. Walmart publishes no member count and no renewal rate, which Costco does; until it does, the growth rate is the only evidence the programme is becoming a franchise.

Source: Walmart second-quarter fiscal 2027 results (August 20, 2026) ↗
⚠ Threats to the moat
⚠ THREAT 01
The Renewal Rate Walmart Cannot Report
A company with Costco's renewal rate would publish it.
References
  1. ReportedMembership and other income was $6,750 million in fiscal 2026, against $5,488 million two years earlier.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - consolidated financial statements and notes (total revenues $713,163M, net sales $706,413M, membership and other income $6,750M, cost of sales $535,395M, operating expenses $147,943M, operating income $29,825M, net income attributable to Walmart $21,893M, diluted EPS $2.73; balance sheet including inventories $58,851M, accounts payable $63,061M, property and equipment net $136,083M, accumulated depreciation $134,587M, depreciation and amortisation $14,203M; segment note; disaggregation of revenue by merchandise category and by market, and eCommerce net sales by segment) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  2. ReportedWalmart+ is the newer and more interesting one: an annual membership giving unlimited delivery with no order minimum, delivery from store, fuel discounts, mobile Scan & Go and additional benefits.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - Item 1 Business and Item 2 Properties (approximately 280 million customers a week across more than 10,900 stores in 19 countries; 2.1 million associates, 1.6 million in the U.S.; 4,611 Walmart U.S. retail units of which 3,728 owned, 601 Sam's Clubs of which 464 owned, 5,743 international stores of which 1,486 owned; 3,566 supercenters at 633,724 thousand square feet, 351 discount stores at 36,609, 694 neighborhood markets and small formats at 36,609/28,375 with a 42,000 average; 192 U.S. and 179 international distribution facilities, 149 owned; pickup and delivery at over 8,400 locations globally; EDLP and EDLC; private brands; competition; Flipkart and PhonePe majority stakes in 2018) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  3. ReportedMembership fee revenue grew 17% globally in the June 2026 quarter, with Walmart+ net additions at a record second-quarter high and Sam's Club fee revenue up 6%; the company credits double-digit growth in Walmart+ fees for most of the increase in membership income over the past two years.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
  4. ReportedMembership fee revenue grew 17% globally in the June 2026 quarter, with Walmart+ net additions at a record second-quarter high and Sam's Club fee revenue up 6%; the company credits double-digit growth in Walmart+ fees for most of the increase in membership income over the past two years.
    Walmart Form 10-K, fiscal year ended January 31, 2026 - Item 7 MD&A (Walmart U.S. comparable sales +4.3% with eCommerce contributing approximately 4.3 percentage points; return on assets 8.2% and return on investment 15.1% against 15.5%; net cash provided by operating activities $41,565M, payments for property and equipment $26,642M, free cash flow $14,923M against $12,660M and $15,120M; rent $2,434M; cash $10.7 billion and a $22.6 billion working capital deficit; membership income commentary) — FY2026 (ended January 31, 2026) · publ. March 13, 2026 · source ↗
  5. ReportedIt was 15.6% against 5.9% in the June quarter.
    Walmart second-quarter fiscal 2027 earnings release (Form 8-K exhibit 99.1) - revenue $187.9 billion +5.9% and +5.1% in constant currency; operating income +28.8% and +17.4% adjusted in constant currency; global eCommerce +23%; global advertising +38% with Walmart Connect excluding VIZIO +43%; membership fee revenue +17%; gross profit rate +96 basis points and Walmart U.S. +158; Walmart U.S. comp sales +2.6% and operating income +20.6% with operating expenses deleveraged 72 basis points; Sam's Club operating income +44.3% and International +16.6%; ROA 8.0% and ROI 15.4%; free cash flow $5.5 billion; 42.3 million shares repurchased for $5.1 billion year to date; FY27 guidance of 4.0-5.0% net sales growth, 7.0-8.5% adjusted operating income growth and $2.80-$2.87 adjusted EPS — Q2 FY2027 · publ. August 20, 2026 · source ↗
Sources
Generated September 22, 2026