Walmart+ makes inroads while Amazon tries to protect its Prime advantage

The news: Walmart+ members have a new perk: discounted fast food. In what the retailer touted as a “first-of-its-kind partnership” with Burger King, subscribers will now receive 25% off one digital order daily—either in-app or online.

Starting next month, members will also be eligible for one free Whopper per quarter with a digital purchase.

The rationale: The Burger King tie-up is Walmart’s latest attempt to make Walmart+ membership more enticing to shoppers across income brackets.

• While the retailer is successfully winning over higher-income shoppers on the hunt for deals, the demographics of its membership base align closely with those of its overall audience, making it necessary to offer perks that appeal to those groups.
• “We have members who are delivering very frequently who are below $50,000 a year in income, and we have members who are delivering frequently and growing above $100,000,” John Furner, CEO of Walmart US, said on the company’s latest earnings call.
• Walmart+ members spend over twice as much as the general population at fast-food restaurants, Vanessa Yates, head of Walmart+, told The Wall Street Journal, and many cited Burger King as a favorite in member surveys.

It also helps that Burger King locations and Walmart stores are often in close proximity to one another, making the partnership a win-win for both companies.

Gaining momentum: Walmart’s membership perks—which include free access to Paramount+, travel benefits, and discounts on gas in addition to free shipping on online orders—are resonating with consumers.

• Walmart+ sign-ups grew by double digits in Q2, CEO Doug McMillon said on the company’s earnings call.
• 26% of US adults pay for a Walmart+ membership, per the June edition of the EMARKETER Ecommerce Survey, up 12 percentage points from June 2023. That’s nearly as many as the proportion who pay for a Costco membership (27%), and nearly three times the number who subscribe to Instacart+ (9%).
• Importantly, subscribers are sticking around: Annualized retention reached its highest level in the first half of the year since the program’s inception, a spokeswoman told The Journal.

Amazon defends its turf: As Walmart+ gains momentum, Amazon is taking steps to protect Prime’s advantage.

• The retailer announced the return of its October Big Deal Days sales event, which like Prime Day will be open only to Prime members.
• Amazon is also taking aim at Walmart’s grocery dominance with a cheaper version of its grocery delivery membership that costs $99.99 annually for Prime members, where previously it was only available for $9.99 per month.
• The company is also making its discounted grocery subscription available to all members of its lower-cost Prime Access program, which offers Prime membership at half-price for recipients of qualifying government assistance.

The big takeaway: While Amazon Prime has a significant edge over Walmart+, the latter retailer’s efforts to boost the value of its membership are helping it narrow the gap.