Walmart, once ordered to ‘eat the tariffs,’ is giving employees a year-round 10% discount to help them eat

By Nick Lichtenberg Fortune Intelligence Editor

In its largest employee perk rollout in years, Walmart is extending its 10% grocery discount to cover nearly all food categories for its 1.6 million U.S. workers—marking a significant boost to benefits at the nation’s largest private employer. Announced in a LinkedIn video by Kieran Shanahan, executive vice president and chief operating officer at Walmart U.S., the change is effective immediately and applies both in-store and online, signaling Walmart’s bid to support its workforce amid rising food prices and retention challenges.

In a separate LinkedIn post, JD Mahaffey, group director and global head of executive total rewards, expanded on the new benefit: Previously, Walmart’s 10% discount for employees was limited to fresh produce and select general merchandise, and most grocery items were excluded except during the November to December holiday season. With the new policy, nearly every food category is covered year-round, including staples such as dairy, frozen foods, dry groceries, meat, and seafood. In total, approximately 95% of regularly priced items in-store are now eligible for the discount.

All employees and eligible corporate staff receive a discount card after 90 days of employment. The move was prompted by persistent worker feedback that called for more comprehensive and accessible perks, particularly as food inflation has squeezed household budgets. “We’ve heard your feedback that these savings make a real difference for you and your families,” chief people officer Donna Morris wrote in a staff memo shared with Fortune. In fact, she described it as “one of our most requested benefits.”

Why is Walmart doing this now?

The expansion comes as economic pressures weigh on households nationwide. Recent government data shows food prices for staples such as eggs and meat have jumped sharply year over year. The move also coincides with heightened concerns over new tariffs that threaten to further raise prices across major retailers, Walmart included. More than half of grocery shoppers surveyed in August cited tariffs as their top worry about food costs.

By ramping up employee benefits, Walmart is responding to both external market forces and internal demand. It’s a strategic step designed to bolster recruitment and retention at a time when competition for retail talent is fierce. Analysts note the company’s efforts to improve its work culture, including earlier expansions of training programs, wage hikes for hourly staff, and the introduction of bonus programs for frontline workers.

COO Shanahan explained in the company video: “We know the impact this discount has for so many associates and their families, and one consistent piece of feedback we hear is to look at how we can make our associate discount program even better.”

How does Walmart compare with other retailers?

With the new perk, Walmart’s benefits now align more closely with those of leading competitors. Target offers a similar 10% discount on most merchandise plus 20% off select food items, while Kroger gives staff 10% off house-brand products and other categories. Hy-Vee (a Midwest grocer) and Trader Joe’s have even more generous policies, with discounts of up to 20% for employees.

The timing of the announcement is crucial, coming just days before Walmart’s quarterly earnings release and as the company grapples with both supply-chain challenges and inflation pressures. As economic uncertainty continues to roil the retail sector, Walmart’s expanded grocery discount stands out as both a smart business maneuver and a measure aimed at fostering goodwill among its massive employee base.

In May, Walmart issued a warning along with its earnings report that it may have to raise prices because of the anticipated impact of President Donald Trump’s tariffs. “We’re wired to keep prices low, but there’s a limit to what we can bear, or any retailer for that matter,” chief financial officer John David Rainey told the AP at the time.

Trump responded by ordering Walmart to “EAT THE TARIFFS.” This move by Walmart appears to confirm that Walmart can’t eat all of them, and it will at least be helping its employees take home something to eat for the pre-tariff prices they used to see.

Walmart did not immediately respond to a request for comment.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.  (snip)