According to Bloomberg, Walmart’s markup on 36-pack of Coors Light cans or Tecate cans is only .6% in the Los Angeles area. The retailer is selling 24-packs of Corona bottles at only 1% above cost.
Meanwhile, the markup on 20-ounce bottles of Coke is nearly 30%, while the markup on other supermarket staples like Cheetors and Cheerios is around 16% at the same store.
The goal is to entice customers into the store with bottom-dollar beer prices and hope they stick around to buy some of those items with substantially larger margins.
“This is nothing new that we’re investing in price in adult beverage,” a company rep told Bloomberg. “Grocers have long invested in this to drive traffic.”
Walmart has previously revealed plans to use low-priced beer as a lure for customers, but most people were not expecting that the retailer would go so far as to sell some products at cost.
In the last year, reports Bloomberg, Walmart has doubled the number of staffers responsible for buying beer and booze while clearing out more shelf space for the adult beverages.
What remains to be seen, and what’s not mentioned in the Bloomberg story, is the impact these sorts of deep discounts can have on competing beer-sellers who are unable to balance out those discounts with higher margins on other items.