Wal-Mart upgrades its beef, grocery competition heats up

Just in time for Fourth of July barbecues, Wal-Mart has upgraded its beef to certified Angus across the U.S. as the fight for food shoppers' cash intensifies.

For the past year, the nation's biggest grocer worked with meat giants including Tyson Foods Inc. and Cargill Inc. to secure a supply of Angus steaks and roasts at no additional cost to consumers, said Scott Neal, Wal-Mart's senior vice president of meat, seafood and quality control.

The higher-quality cuts have been available in all of Wal-Mart's 4,700 U.S. stores since March, but the retailer hasn't announced or advertised the shift yet.

The move is part of Wal-Mart's response to rapidly intensifying competition. German discounters Aldi and Lidl are expanding aggressively, and Amazon.com's purchase of Whole Foods Markets Inc. threatens to upend the industry.

Wal-Mart also wants to entice shoppers by offering curbside pickup of online grocery orders and improving the quality of fresh foods such as produce and meat that are a key draw for customers.

'All purveyors of food are being forced to step up their game,” said Bill Lapp, president of consulting business Advanced Economic Solutions. 'There is such disruption in the grocery store sector that you have to do something.”

With its marbled, tender cuts, Angus beef has become synonymous with quality. Demand for the meat has skyrocketed in recent years, with fast-food chains such as McDonald's, Burger King and Hardee's offering Angus burgers.

While U.S. beef consumption has dropped over the past decade because of a 2014 drought that cut the herd to the smallest since 1951, the USDA's Economic Research Service is predicting a rebound thanks to increased supply. Demand also could increase now that China has restarted imports of U.S. beef, lifting a ban in place since 2003.

'Beef is an absolute opportunity for us in terms of where we can grow,” Wal-Mart's Neal said. 'Our market share is not where we want it to be relative to the rest of the store.”