Walmart reduces Walmart+ subscription fee for food stamp recipients

Walmart is lowering the cost of its subscription service for American customers who receive food stamps and other types of government assistance. The retailer aims to expand the program and has noticed increased price sensitivity among shoppers.

Starting July 20, Walmart will offer a 50% discount on Walmart+ to eligible low-income households. These customers can pay either $49 per year or $6.47 per month, compared to the regular price of $98 per year or $12.95 per month for other members.

This move by Walmart could help capture and retain shoppers who are more cautious about recurring fees or who may turn to other retailers. Walmart has not disclosed the total number of Walmart+ subscribers, but approximately 25% of its members receive government assistance. However, the company did not provide a comparison to its overall customer base.

During Walmart’s recent earnings call in May, CEO Doug McMillon highlighted that customers are feeling the burden of higher grocery bills, especially due to persistent inflation. This inflation is one of the major factors causing uncertainty for the company in the second half of the year.

Many families struggling to afford groceries are also receiving reduced Supplemental Nutrition Assistance Program (SNAP) benefits, previously known as food stamps, since pandemic-related emergency funding ended earlier this year.

Walmart’s discounted price could make Walmart+ more accessible to a larger number of shoppers, considering that over 41 million Americans received SNAP funding in 2022. Please note that this number does not include individuals receiving other types of government assistance that may qualify for the discount. Most of the aid programs on the list, such as Medicaid and the National School Lunch Program, primarily support families with children or those facing food insecurity.

Walmart introduced Walmart+ in 2020 with the aim of attracting shoppers and increasing their spending on its website and in stores. It is a comparable service to Amazon Prime and follows the membership-based warehouse model of retailers like Costco and Walmart-owned Sam’s Club.

Walmart+ members enjoy benefits such as free shipping, fuel discounts, access to the Paramount+ streaming service, and unlimited deliveries of online orders of $35 or more to their doorstep.

While the program has seen some success, Walmart is still looking for ways to increase its adoption as it lags behind Prime. According to estimates from market researcher Consumer Intelligence Research Partners, Walmart+ has around 12 million members. Other estimates, including one from Morgan Stanley, suggest the count is higher at approximately 21.5 million members, representing about 17% of household penetration in the U.S. However, both figures still pale in comparison to Amazon Prime’s estimated 170 million memberships in the U.S.

Amazon also offers a similar discounted fee for low-income households that qualify for government assistance and sign up for Prime. They can pay $6.99 per month instead of the full $14.99 per month. This lower fee was introduced in 2017.

In addition to the discounted price, Walmart has made it easier for families receiving food aid to shop online. They now accept SNAP online in all 50 states. Customers who qualify for SNAP can add their benefits card to Walmart’s app or website, allowing them to purchase groceries online or use curbside pickup.

Amazon accepts SNAP in all states except Alaska.

Expanding the subscriber base of Walmart+ comes with several benefits for Walmart. Not only does it provide a steady revenue stream from monthly and annual fees, but it also enables the retailer to gain valuable insights into customer preferences and purchases. These insights can be used to support Walmart’s analytics tool, Walmart Luminate, which is sold to clients, or to bolster its growing advertising business, Walmart Connect.