I am absolutely positive that it is a loss leader. As a matter of fact, I heard from someone who I trust, Walmart grocery pricing is a loss leader in totality, as their lower prices are a draw to get people into the stores to purchase their higher margin products, such as their clothes.
It’s really ridiculous. The other day, I needed a replacement battery for my car key fob. I ordered it in the morning around 9am. It was delivered by a person in a car (probably performing grocery deliveries nearby) five hours after I ordered it. The total, was $1.75. There is no option to tip as this is a regular shipped order (think like Amazon Prime). My wife will order a can of soup sometimes. I tell her we need to stop doing this as it will surely bankrupt an excellent service.
Quite frankly, we find their bakery, dry goods, dairy and store brand quite excellent as well as their produce. Their meats and seafoods outside of ribs and brisket (which are pretty much the same wherever you go) leave a lot to be desired and don’t price that terribly well anyway.
We still have to run into Whole Foods periodically for things Walmart doesn’t carry, but faint at the prices every time.
And Jon… enjoy all of the referral bonuses. I’ve been doing nearly all of the bank and brokerage offers as I sold my investment property and need to park 800K until their is blood in the streets of the equity markets. I got completely out in October and am only 30% of the way back in. I will be retiring early, like you, when the market bounces back and put nearly my entire net worth back in near the bottom of a once in a lifetime correction.
Thanks for all of the offers. You’ve literally made me probably six figures over the years, just with the credit card bonuses alone. 😛