Who Spends More: The Whole Foods or Walmart Shopper?

Posted by Alex on Feb 29, 2016 3:30:00 AM

Comedians have made a habit of poking fun at Whole Foods. The grocery store’s reputation forhigh prices and stereotypes about its clientele have been the focus of many talk show routines and stand-up specials. As it turns out, selling $6 asparagus water makes you a pretty easy target.

Whole Foods has started selling rabbit meat. They’re killing them humanely; they’re only using rabbits who died of shock after seeing the prices at Whole Foods. 

– Conan O’Brien

Whole Foods, undoubtedly, is expensive. But when we step back and look at the average total cost per visit, is it really where Americans spend the most on grocery shopping?  

At Perfect Price, we maintain a database of billions of credit card transactions so we have a view into how much people actually spend when they go to these stores. Our curiosity about typical grocery shopping bills inspired us to analyze our data on the the typical amount spent at the most popular stores in the United States.

The table below shows the average spent per trip at the top food sellers in the United States. We included all food sellers in the top 25 of all retailers in terms of revenue, as well as a couple of other notable chains (like Trader Joe’s and Seven Eleven). For each of these stores, Perfect Price data includes thousands of trips in May and June of 2015. Though food items make up a large proportion of spending at all of these stores, they all sell non-food items to varying degrees.

Far and away, consumers spend the most at  Costco, the third largest retailer in the United States. It’s no surprise to see Costco at the top of the list. As a wholesaler, the company offers low unit prices in exchange for consumers purchasing in bulk. You can’t just buy one pack of oreos at Costco -- you have to buy ten. Costco is followed distantly by Sam’s Club, it’s primary wholesale competitor.

At the very bottom of the list is 7-Eleven, the largest convenience store chain in the United States. The average spend per trip  at 7-Eleven is less than 15% of that at Costco. In fact, almost half of all purchases at 7-Eleven are for less than ten dollars. The chart below shows the percentage of purchases at each store of ten dollars or less. Interestingly, almost 10% of Costco purchases are less than $10 buys (perhaps Costco food court lovers?).

The average spend for trips to Walmart, Whole Foods and Trader Joe’s all fall in the range of $50-$55. We were interested in just how similar the distribution of bills were at these stores, and how they compared to Costco. Below, we parse out the percentage of purchases that fall into different spending categories: $0-$10, $10-$25, $25-$50, $50-$100, $100-$200, and over $200.

The distribution of spending at Whole Foods and Walmart —stores that are diametrically opposedin the cultural imagination —are actually quite similar in terms of the distribution of spend. Slightly more people spend less than $25 on a trip to Whole Foods, and slightly more spend between $25-$100 at Walmart, but overall, the distribution of how much people spend on trips to these stores are remarkably alike.

Trader Joe’s shoppers are heavily concentrated in the $10-$100 range with nearly 9 out of every ten falling in the category. People making trips to Trader Joe’s rarely spending very little, but are also unlikely to be going on a shopping spree. In contrast, Costco shoppers go big at an unusually high rate. Nearly 20% of trips to Costco are for bills of $200 or more, this is true of less than 5% of trips to Whole Foods, Walmart and Trader Joe’s.

Given the impassioned feelings Whole Foods incites, we were intrigued about how spending differed at the store across cities. Were there certain cities where Whole Foods bills were unusually high? The next table shows the average spend in the twenty cities with the most shopping trips. What we found surprised us.

The city with the highest spending per trip is Chicago with an average of $66. This is more than double what we found for trips in Boston, and 50% more than trips in Austin and Portland. Boston, Austin and Portland, the places with the lowest Whole Foods spend per trip, are all places whereWhole Foods stores are abundant. Making a trip to Whole Foods in these cities is less of a hike for people in these cities, so they are more likely go for a smaller trip.

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It has been nearly a century since grocery shopping, in its modern serve-yourself form, emerged. It used to be that a clerk personally collected whichever items shoppers requested. Today, stores of all shapes and sizes have materialized to meet Americans’ shopping needs. And as we’ve seen here, what we spend at those stores — from Whole Foods to Costco to 7-Eleven — varies tremendously. If you want this sort of data for your business, please get in touch.

Photo Credit: Wikipedia.org.