What Walmart’s Earnings Tell Us About Aldi – and the American Consumer

Walmart is winning grocery, but its latest results support the trend that consumers’ definition of value is changing. Aldi may be one of the reasons

There is a temptation to look at Walmart’s latest earnings and see a familiar story. America’s largest retailer continues to gain grocery market share, e-commerce is growing rapidly, advertising is becoming a powerful profit engine and the company raised its outlook.

All of that is true. But there is another story buried inside the numbers, one that may be more important for the grocery industry over the next several years.

Walmart is spending heavily to defend its position as America’s value retailer at a time when consumers are becoming more deliberate about where every dollar goes. While Aldi remains a fraction of Walmart’s size, its rapid expansion and unusually clear price proposition are helping reshape what consumers expect from a grocery store.

Walmart’s second-quarter results therefore tell us something important about Aldi, but perhaps even more about the American consumer.

Walmart Is Still Winning Grocery

Walmart U.S. delivered 2.6% comparable-sales growth in the quarter, or 3.4% excluding health and wellness. Transactions increased 1.5% and average ticket increased 1.1%, while Walmart said grocery and general merchandise continued to show steady growth.

More importantly, Walmart continues to gain grocery share while its e-commerce business expands rapidly. U.S. e-commerce sales increased 24%, with particular strength in store-fulfilled delivery, while the company said its broader e-commerce business grew 23% globally.

That combination shows why grocery remains so important to Walmart. Grocery creates frequent traffic and gives the company an opportunity to capture a much broader share of household spending.

A customer who comes to Walmart for milk, meat and produce can also buy clothing, household goods, pharmacy products and general merchandise. That customer can order online, subscribe to Walmart+ and purchase from Walmart Marketplace, creating additional revenue opportunities around the original grocery trip.

The numbers increasingly demonstrate how powerful that ecosystem has become. Walmart’s advertising business grew 38% in the quarter, membership fee revenue increased 17% globally and Marketplace continues to expand rapidly.

For Walmart, grocery is therefore more than a grocery business. It is the traffic engine for an increasingly sophisticated retail platform.

The Price Battle Is Really About Perception

Perhaps the most consequential piece of Walmart’s earnings story is what the company plans to do with the nearly $2.9 billion it received in tariff refunds. Walmart has said it is directing those funds back into the business, with price investment and customer experience among the priorities. 

That turns what could have been a one-time financial benefit into a potentially significant competitive weapon.

Walmart could have allowed the refund to flow through to earnings, strengthening the bottom line and rewarding shareholders. Instead, the company is effectively putting the money back into the marketplace, using a windfall created by tariffs to lower prices and reinforce its value proposition with consumers.

The scale of that decision should not be overlooked. A $2.9 billion pool of money gives Walmart considerable flexibility to absorb price reductions, expand rollbacks and selectively lower prices on products that matter most to consumers’ perception of the overall basket. The company does not have to reduce prices uniformly; it can concentrate investment where it will have the greatest effect on traffic, basket size and price perception. I think that’s really important to note. 

There is certainly a public-relations benefit. At a time when consumers remain frustrated by the cumulative impact of food inflation, Walmart can tell shoppers that money collected through tariffs is being returned to them at the shelf. That is a compelling message, particularly when household budgets remain under pressure.

It’s interesting to see what Walmart is choosing to defend. After several years of elevated food prices, consumers may not know the price of every item in a store, but they have developed increasingly strong impressions about which retailers are expensive and which ones represent value. Those impressions can determine where a shopper makes the weekly trip before they ever begin comparing individual products.

Walmart has spent decades building the perception that it is one of the most affordable places for a price-conscious consumer to shop. The tariff refund gives the company an unusual opportunity to reinforce that position at a moment when the competitive landscape is changing.

That is where Aldi enters our conversation. Aldi’s growth is built around the idea that consumers can simplify the grocery trip, rely heavily on private label and consistently find value through a lower-cost operating model. 

Walmart’s decision to recycle billions of dollars into price investment suggests that it recognizes the importance of making sure that Aldi’s proposition does not become more compelling than its own.

Aldi Doesn’t Need To Beat Walmart Everywhere

Aldi is still dramatically smaller than Walmart, but size isn’t necessarily the best measure of its strategic significance.

Aldi plans to open more than 180 stores in 2026, bringing its U.S. footprint to nearly 2,800 locations. The company has set a goal of reaching 3,200 stores by the end of 2028 and says 17 million new customers visited its stores in 2025. Aldi also plans to invest $9 billion in its U.S. operations through 2028.

That is an extraordinary expansion for a retailer whose business model is intentionally narrow.

Aldi isn’t trying to become Walmart. Instead their model is built around a limited assortment, high private-label penetration and a relatively simple shopping proposition designed to keep operating costs low.

That proposition is resonating with consumers across income levels. Recent reporting has found that the shift toward private-label products and value-oriented retailers is increasingly extending beyond households under financial pressure, with higher-income consumers also looking for ways to stretch their grocery dollars. 

In short, high prices have broken consumer brand loyalty.

That represents an important change in the American grocery market. For years, “trading down” was generally associated with financial hardship; increasingly, it can simply mean that consumers are questioning whether paying more actually gets them more.

Aldi’s Real Messaging Is Price Confidence

Aldi’s model makes direct price comparisons somewhat complicated. Walmart may be cheaper on particular products, while Aldi can be less expensive on others. The prices vary by market and assortment.

A recent comparison of dry grocery items found an Aldi basket at $19.18 versus $21.05 at Walmart, an 8.9% difference. The precise gap will vary by market and by product, but the broader point is that Aldi has – quickly – established a strong value reputation.

Consumers don’t have to believe Aldi is cheaper on every SKU. They simply have to believe that Aldi is a place where they can reliably find good prices. 

I think this might be the most important and actionable insight from looking at these two retailers. It’s messaging and positioning that every grocery store should be using. 

Aldi has turned its operating model into a powerful consumer promise built around fewer choices, lower costs and a straightforward value proposition. Walmart has a much broader and more complicated proposition with its ecosystem. 

It has an enormous assortment, national brands, private brands, general merchandise, e-commerce, delivery, pharmacies and financial services, all of which create tremendous value for consumers but also make the price message more complex. Walmart ultimately has to continue to communicate one fundamental idea: shoppers can trust Walmart to deliver value.

The American Consumer Is Becoming More Selective

Walmart’s 2.6% U.S. comparable-sales growth remains healthy, but it is well below the 4%-plus pace that had become familiar during earlier periods of strong consumer spending.

Transactions grew 1.5% and average ticket increased 1.1%. Walmart executives have also acknowledged increasing caution among consumers as household budgets face pressure from higher fuel costs and other expenses.

The American consumer is becoming more selective rather than simply disappearing from the market. This may be another opportunity within our current environment.

Middle- and lower-income households are under greater pressure, while affluent consumers continue to spend across categories and price points. It is creating a consumer environment in which people are still buying but are paying closer attention to the value attached to those purchases.

Food is both necessary and highly comparable. Consumers may tolerate paying more for a restaurant meal or an experience, but the differences between a gallon of milk, a package of chicken or a box of cereal can be much easier to evaluate.

The result is a consumer who increasingly asks a simple question: Is this worth it?

That question puts pressure on national brands to justify their premiums, supermarkets to justify their margins and retailers to demonstrate why their value proposition deserves a place in the weekly shopping routine.

Private label becomes more attractive. Discount formats become more attractive. Loyalty programs and promotions become more important, and retailers with structural cost advantages gain leverage.

The important change is that this behavior is spreading beyond the consumer who is simply trying to make ends meet. A higher-income household may still have plenty of money to spend, but that doesn’t mean it is willing to spend unnecessarily. That is a subtle but important shift in consumer psychology. 

Today’s grocery shopper increasingly sees finding value as a measure of intelligence rather than income.

We’ve talked about this at length before, but value has become a much broader concept than price. Consumers are increasingly asking how much they are getting for the things they consider important, and whether the total experience justifies what they paid.

Beyond Walmart and Aldi

Walmart’s latest earnings offer a useful window into where American grocery may be headed.

Walmart’s is not simply trying to maintain grocery traffic. It is protecting the perception that Walmart is the place where a consumer can get a competitive basket without having to spend considerable time proving it.

The growth of value-oriented retailers gives shoppers more alternatives, while technology makes it easier to compare prices and promotions. Today’s consumer is becoming more comfortable with switching brands, switching stores and switching formats in search of value.

Walmart is still winning on scale, convenience, assortment and technology. Its grocery business continues to generate traffic, while e-commerce, advertising, membership and Marketplace create additional economics around that customer relationship.

At the same time, Walmart is making an unusually large investment in price at precisely the moment when Aldi is expanding rapidly and consumers are becoming more selective about value. Aldi does not need to become the next Walmart. It needs to make consumers more conscious of the possibility that another retailer can offer a better deal.

Walmart has the opportunity to use that money to reset price perception across thousands of stores and millions of shopping baskets. That is a powerful position to be in. Walmart is responding with scale while Aldi is responding with simplicity.

For the rest of the grocery industry, however, the direction is less clear and perhaps even uncomfortable. Everyone else will have to decide what their response will be.