Walmart copies a core Costco move that also benefits customers

When people think of Walmart, low prices and massive stores stocked with inventory tend to come to mind. But it’s important to remember that Walmart’s workforce is what keeps the operation going.

Walmart employs about 2.1 million people in total, with roughly 1.6 million associates located in the U.S.

Now, Walmart is making a change to its workplace benefits. 

The move evokes a key Costco strategy that’s long worked well and helped the warehouse club giant stand out in the competitive retail industry.

Walmart boosts its healthcare benefits package

Walmart has announced major enhancements to its U.S. employee benefits package in October, including free prescription medications for hundreds of drugs, expanded access to specialists for rare conditions, and dedicated paid leave for eligible employees whose newborns require intensive care.

The changes will begin in 2027, except for neonatal intensive care unit (NICU) leave, which begins Nov. 17, 2026.

“We’re adding even more ways for our associates and their families to live better through comprehensive and affordable healthcare and benefits,” said Walmart Chief People Officer Donna Morris in the press release.

The new health benefits are designed to target a wide range of employees. 

Walmart’s Zero Dollar prescription tier, for example, applies to more than 250 generic, brand-name, and specialty medications.

The move comes on top of Walmart’s already affordable health insurance options. The company says full-time and eligible part-time employees can access medical coverage starting at $39.80 per biweekly pay period.

The above changes, however, give employees additional financial protection and support during some of life’s most expensive and stressful healthcare situations.

Walmart aims to follow Costco’s lead with top-tier employee benefits

Walmart’s boosted healthcare benefits reflect a broader lesson from Costco, which has long been a huge competitor. 

Costco has built a reputation for offering competitive pay and benefits, including affordable health insurance, helping it retain employees for years rather than constantly replacing workers who leave for other opportunities.

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The company’s fiscal 2026 annual report said approximately 94% of its U.S. and Canadian employees who had been with the retailer for at least one year remained with the company. 

Costco also reported an average hourly employee wage of approximately $33 in the United States at the end of the fiscal year.

Those figures reflect a workforce strategy built around competitive compensation, benefits, and opportunities for advancement.

But strong workplace perks don’t just benefit employees. They benefit customers indirectly.

When employees are happy with their benefits, they tend to stay longer. That stability can translate into a more consistent shopping experience.

A more stable workforce can reduce the disruption associated with frequent hiring and training. Experienced employees may also be better equipped to answer questions, resolve problems, and help customers navigate a busy store.

For Costco, those benefits support a business model that depends on high sales volumes, operational efficiency, and members who believe their annual fees are worth paying.

Walmart’s new benefits do not mean it will automatically achieve Costco’s retention levels. The retailers have different workforces and operating structures, and benefits are only one factor influencing employee turnover.

Still, Walmart’s investment underscores the reality that employee welfare and customer satisfaction are not necessarily separate goals. When retailers help workers manage healthcare expenses and family responsibilities, they may also improve their ability to attract and retain experienced employees.

A better-supported workforce can help create a more reliable, efficient, and pleasant shopping experience that gives customers another reason to return.

Maurie Backman owns shares of Walmart and Costco.

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