Walmart is stepping up its fight for shoppers' loyalty with a new combined membership that bundles its Walmart+ service with Sam's Club Plus. Priced at $120 per year, the package is designed to compete directly with Amazon Prime and Costco's executive membership, according to analysts at Oppenheimer.
The move comes as retailers increasingly lean on subscription programs to lock in repeat customers and drive higher spending. For Walmart, the bet is that a single, simpler membership will appeal to households that already shop at both its supercenters and its warehouse club chain.
What the bundle offers
Oppenheimer notes that the combined membership is priced to save shoppers about $98 compared with buying Walmart+ and Sam's Club Plus separately. That's a significant discount, and it adds a key perk: home delivery from both Walmart and Sam's Club without markups, meaning online prices match what you'd pay in the store.
For everyday shoppers, the appeal is straightforward. Instead of juggling two memberships, they get one subscription that covers grocery delivery, fuel discounts, and warehouse club access. The savings on delivery fees alone could be meaningful for families that order groceries regularly.
But Oppenheimer also flags a potential downside for Walmart's bottom line. While membership fees are typically high-margin because the cost of adding one more subscriber is low, delivery is the opposite. Each additional delivery order comes with labor, fuel, and logistics costs. Expanding delivery without raising prices could squeeze profits, at least in the short term.
Why this matters for investors
For investors, the key question is whether the bundle will drive enough new memberships and higher spending to offset the initial profit hit. Subscription programs are a proven way to build customer loyalty, and Walmart has been investing heavily in its e-commerce and delivery infrastructure to compete with Amazon.
Oppenheimer's analysis suggests the bundle is a deliberate strategy to poach customers from Amazon Prime and Costco. Amazon Prime has long been the default for online shopping and streaming, while Costco's membership model is famous for its renewal rates and high customer spending. By offering a cheaper combined option, Walmart is trying to position itself as the value leader in both online and warehouse shopping.
However, the near-term profit pressure is real. Delivery costs are variable and tend to rise with order volume. If Walmart's delivery network isn't efficient enough, the added volume from new members could erode margins. That's a risk investors will be watching closely in upcoming earnings reports.
What to watch next
Investors should keep an eye on membership numbers and renewal rates, as well as how quickly delivery costs scale. Walmart has been expanding its delivery capabilities, including through partnerships and automation, which could help bring costs down over time.
The competitive landscape is also shifting. Amazon has raised Prime prices in recent years, and Costco has increased its membership fees, giving Walmart an opening to attract price-sensitive shoppers. If the bundle succeeds, it could pressure rivals to respond with their own promotions or bundles.
For now, Oppenheimer's view is that the bundle is a smart customer acquisition play, even if it trims profits in the near term. The long-term payoff depends on whether those new members stick around and spend more than the cost of serving them.
Walmart's broader strategy has been to blend its physical stores with digital services, and this bundle is another step in that direction. The company has also been experimenting with AI shopping agents and other tech to improve the customer experience. And its recent $6 billion bond sale suggests it's willing to invest heavily in growth.
For everyday investors, the takeaway is that Walmart is making a bold move to defend its turf in the retail wars. The bundle may not boost profits right away, but it could strengthen the company's competitive position over the long run. As always, it's worth watching how the numbers play out in the coming quarters.
