Milk is a staple in many consumers’ kitchens, with over 58% of Americans drinking milk as a quality source of protein and calcium. When customers visit their local Walmart store for everyday essentials, they’ll expect to buy milk at discount prices.
However, if you have ever visited a Walmart, you would have noticed that they sell milk at incredibly low prices. So, why is Walmart’s milk so cheap? Here is what I discovered!
5 Reasons Why Walmart Milk Is So Cheap!
Walmart sells cheap milk to attract larger volumes of consumers to stores where they’ll purchase additional goods, generating overall profits. Additionally, Walmart saves on hefty manufacturing and importation costs by producing their milk at privately labeled milk at their own facilities.
If you’d like to know the 5 primary reasons why milk at Walmart is so cheap, where it comes from, and the strategy behind the price point, then keep reading!
1. Walmart Sells Milk At A Loss
Walmart maintains a low price point on traditional milk and lactose alternatives, even if that means selling at a loss (also known as a loss leader).
As a result, consumers that head to their local Walmart in search of discounted milk products are more likely to spend additional money on regular-priced groceries.
However, as a department store, customers tend to spend more money than they initially expected on non-grocery products.
2. Walmart’s Low-Cost Milk Attracts Customers
Walmart strategically reacts to the growing price of milk by offering multiple cheaper alternatives. 90% of Americans live within 10 miles of a Walmart store, providing the company with a large community of consumers seeking affordable dairy produce.
Additionally, customers are increasingly opting for low-priced milk and dairy products instead of costly organic or branded options.
Also, grocery stores have seen a sharp rise in the price of branded milk options, influencing customers to go for Walmart’s cheaper alternatives.
3. Walmart’s Private Label Milk
If you’ve ever shopped at Walmart, you’ll be familiar with their company-owned brand, Great Value.
In recent years, Walmart opened its first U.S. milk production facility in Fort Wayne, Indiana, producing milk under the Great Value Brand.
Additionally, Walmart is set to acquire around 25 milk plants within a 210-mile radius of their new facility.
In light of this, Walmart skips on hefty supplier costs meaning they can afford to sell milk that lives up to its Great Value name.
Consequently, Walmart’s milk manufacturing sites put local dairy farms at risk of closure, reducing the choice of milk available on the market.
4. Offering Milk Cheaper Than Its Competitors
Walmart is determined to beat its competitors on price, particularly on basic necessities such as milk.
Customers can expect to pay just $1.48 for half a gallon of reduced/whole traditional or chocolate milk. For the price of an extra dollar, customers can purchase an entire gallon costing $2.46.
To give you some perspective of how cheap the price point is, grocery competitor Publix sells 1 gallon of skimmed and whole milk for around $5.87. Meanwhile, Kroger and Meijer grocery stores sell gallons of milk for approximately $2.80.
5. Walmart Offers Cheap Alternatives To Traditional Milk
Traditional milk is still considered one of Walmart’s most purchased items; however, with customers becoming increasingly eco-conscious, the statistics are beginning to change.
Walmart aims to equally satisfy consumers reaching for almond, soy, and oat milk.
Dairy alternatives are notoriously expensive; however, Walmart offers cheaper options with Great Value almond milk, suitable for vegans, costing less than $2. In comparison, Target sells almond milk for an average price of $3.
Walmart offers milk cheaper than its competitors to attract more customers who will be more likely to spend money on additional items while in-store.
Furthermore, Walmart produces its own range of branded milk, saving on manufacturing and importation costs. Additionally, Walmart also sells lactose alternatives at equally low prices.