Walmart Adds Organic Foods to Its List of Cheap Groceries

A blog about business and economics.
April 10 2014 4:47 PM

Walmart’s Foray Into Organic Food Will Undercut Competitors by 25 Percent

169674950-customers-buys-fresh-meat-inside-a-walmart-supercenter
Walmart is revamping its shelves with Wild Oats organic foods.

Photo by Kevork Djansezian/Getty Images

Walmart is about to become a little bit more like Whole Foods, but at a fraction of the price.

Starting this month, Walmart will offer organic food products from Wild Oats at a price point that beats other national organic brands by 25 percent or more, the company said Thursday.* Wild Oats 15-ounce canned vegetables will retail for a mere $0.88, while two-ounce jars of spices will start at $2.48. (By contrast, Whole Foods' 365 Everyday Value organic line has comparable canned vegetables for between $1.29 and $1.49 and comparable spices for $3.99.)

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With prices like those, it's safe to say that Walmart's organic products will even be undercutting other national nonorganic brands. “We know our customers are interested in purchasing organic products and, traditionally, those customers have had to pay more,” Jack Sinclair, executive vice president of grocery at Walmart U.S., said in a release. “This is part of our ongoing effort to use our scale to deliver quality, affordable groceries to our customers.”

As the nation's largest grocer and retailer, Walmart's plunge into cheap organic food is sure to shake competitors. The organic food market made up $29 billion in U.S. sales in 2012—a figure that's certainly not insignificant but still looks like pocket change next to the $479 billion in sales Walmart did in the last fiscal year.

Stepping away from the strictly financial, offering affordable organic food could be a step toward improving Walmart's image. The big-box retailer is notorious for its poorly stocked shelves, long checkout lines, and understaffed stores—inconveniences that have driven away higher-end customers. Perhaps the promise of cheap organic food will be able to reel some of them back in.

In any case, there's a certain irony in Walmart's new organic food interest. The company has historically stocked its shelves with foods full of substances that are the bane of health-conscious customers—aspartame, MSG, and high fructose corn syrup, among others. Slate found earlier this year that more than 50 percent of food items sold at Walmart would be prohibited at Whole Foods, based on the store's list of 78 banned ingredients. It'll be interesting to see how far some Wild Oats canned vegetables can go toward lowering that figure.

*Correction, April 10, 2014: This post originally misstated when Walmart made the announcement that it would offer organic food products.

Alison Griswold is a Slate staff writer covering business and economics.

 

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