Fifty-Nine Per Cent of It Is FoodWide moat

Walmart (WMT) — moat facet

The cheapest customer acquisition in retail: the customer acquires herself, fifty-two times a year.

Walmart is, by a considerable distance, the largest grocer in the United States, and most descriptions of it still lead with something else.

Walmart U.S. net sales by merchandise category, FY2026Grocery — 59%General merchandise — 24%Health and wellness — 14%Other — 3%Walmart U.S. net sales $482,975M. Sam's Club adds a further $64.7bn of grocery.
Fifty-nine per cent food, in a business whose profit has always come from the other categories. The food is why the customer is in the building.

The numbers: grocery net sales of $285,482 million at Walmart U.S. in fiscal 2026, against $276,003 million and $264,210 million in the two preceding years1, plus a further $64,706 million of grocery at Sam's Club2. Roughly 23.6% of American grocery spending goes through Walmart, against about 10.1% for the next largest chain and 9.2% for Costco3.

The category is defined broadly in Walmart's reporting — dairy, meat, produce, deli, bakery, frozen, beverages, and the consumables that sit beside them: health and beauty aids, pet supplies, household chemicals, paper goods, baby products4. That breadth matters, because it is what makes the weekly trip a full trip rather than a food run.

The strategic value is the frequency rather than the margin. Groceries are the only large retail category bought on a weekly cadence by essentially every household, which makes them the cheapest customer acquisition in retail: the customer acquires herself, fifty-two times a year, and arrives inside a building full of things with better margins on them.

The uncomfortable part is the direction of the mix. Grocery grew 3.4% in fiscal 2026 while like-for-like inflation ran in the low single digits5, which means a meaningful share of the growth is price rather than volume — and it grew while general merchandise did not, so food is becoming a larger fraction of a business it does not fund.

Grocery's share of Walmart U.S. net sales is the number: 59.1% against 59.8% two years earlier6. Stable is the right answer. Rising would mean the trip is becoming a food run.

Moat trajectory: Holding steady

Grocery's share of Walmart U.S. net sales has moved less than a point in two years, which is the right answer. The category grows with inflation and population and is not contestable at Walmart's scale, but a meaningful part of the reported growth is price rather than units.

The number that tests this moat
Moat Explorer calc
Grocery share of Walmart U.S. net sales
59.1%

$285,482M of $482,975M, against 59.8% two years earlier. Stable is the right answer, because grocery generates the frequency and does not fund the margin. A meaningful part of its growth is food price rather than units.

Source: Moat Explorer calculation from the FY2026 Form 10-K ↗
⚠ Threats to the moat
⚠ THREAT 01
Half the Growth Is the Price of Food
Inflation flatters a grocer's reported growth and flatters nothing underneath it.
References
  1. ReportedThe numbers: grocery net sales of $285,482 million at Walmart U.S. in fiscal 2026, against $276,003 million and $264,210 million in the two preceding years, plus a further $64,706 million of grocery at Sam's Club.
    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. ReportedThe numbers: grocery net sales of $285,482 million at Walmart U.S. in fiscal 2026, against $276,003 million and $264,210 million in the two preceding years, plus a further $64,706 million of grocery at Sam's Club.
    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 ↗
  3. Third-party estimateRoughly 23.6% of American grocery spending goes through Walmart, against about 10.1% for the next largest chain and 9.2% for Costco.
    5W Grocery Retail AI Visibility Index 2026 (PR Newswire) - U.S. grocery market share: Walmart 23.6%, Kroger 10.1%, Costco 9.2%, Albertsons 6.4%, Aldi 3.5%, Amazon/Whole Foods 2.8%; the top ten chains hold about 70% of the market — 2026 · publ. 2026 · source ↗
  4. ReportedThe category is defined broadly in Walmart's reporting — dairy, meat, produce, deli, bakery, frozen, beverages, and the consumables that sit beside them: health and beauty aids, pet supplies, household chemicals, paper goods, baby products.
    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 ↗
  5. ReportedGrocery grew 3.4% in fiscal 2026 while like-for-like inflation ran in the low single digits, which means a meaningful share of the growth is price rather than volume — and it grew while general merchandise did not, so food is becoming a larger fraction of a business it does not fund.
    Walmart second-quarter fiscal 2027 earnings presentation (Form 8-K exhibit 99.2) - Walmart U.S. comp sales +2.6% with transactions excluding fuel +1.5% and average ticket excluding fuel +1.1% against total like-for-like inflation of 1.4%, and an approximately 125 basis point pharmacy headwind from maximum fair price regulation; eCommerce +24% including approximately 43% growth in store-fulfilled delivery, total advertising +38% including Walmart Connect +43%, and Marketplace sales +52%; expedited deliveries under three hours approximately 37% of store-fulfilled orders; share gains across categories and income tiers led by upper-income households — Q2 FY2027 · publ. August 20, 2026 · source ↗
  6. Moat Explorer calcGrocery's share of Walmart U.S. net sales is the number: 59.1% against 59.8% two years earlier.
    Moat Explorer calculation from figures in Walmart's own filings: global eCommerce of about $150.4 billion (Walmart U.S. $99.6B + International $35.8B + Sam's Club $15.0B) against $120.9 billion, a $29.5 billion increase against a $31,875M rise in net sales ($706,413M against $674,538M), about 92%; Walmart U.S. selling floor of 698.7 million square feet (633,724 + 36,609 + 28,375 thousand) and net sales per store of $104.7 million ($482,975M over 4,611 stores); operating margin 4.18% ($29,825M/$713,163M) against 4.31% ($27,012M/$648,125M); net margin 3.07%; gross profit rate 24.2% ($171,018M/$706,413M); grocery 59.1% of Walmart U.S. net sales ($285,482M/$482,975M) against 59.8% ($264,210M/$441,817M) and grocery growth of 3.4%; general merchandise to grocery ratio 0.40 against 0.43; health and wellness +26.7% ($54,898M to $69,547M); payables less inventories $4,210M ($63,061M less $58,851M); rent 0.34% of revenue ($2,434M/$713,163M); capital expenditure 64% of operating cash flow ($26,642M/$41,565M); a 1% overrun on $147,943M of expense is $1,479M; eCommerce penetration 27.5% international ($35.8B/$130,423M) and 20.6% at Walmart U.S. ($99.6B/$482,975M); shareholder returns $15,587M ($7,507M dividends plus $8,080M repurchases) against $14,923M of free cash flow; Q2 FY2027 net income attributable down 9.4% ($6,366M against $7,026M); Walmart U.S. comparable sales of about 3.9% excluding the 125 basis point pharmacy headwind — FY2024-Q2 FY2027 · publ. September 2026 · source ↗
Sources
Generated September 22, 2026