To The Moon

Walmart shares took a beating this week after the retail giant posted its slowest U.S. comparable sales growth in six years. Investors weren’t thrilled with the 2.6% comps (ex-fuel) that missed expectations, even though the company beat on revenue and earnings and nudged full-year guidance higher. Management pointed to a couple of culprits: high gas prices tied to the ongoing Iran conflict squeezing lower-income shoppers into trade-offs, and the lingering impact of GLP-1 drugs like Ozempic and Wegovy on how much food people actually buy.

The Iran-war-and-fuel story is pretty straightforward. When gas sits above $4 a gallon for months, people notice. Walmart’s CFO basically said you can almost watch the shift in real time once prices cross that psychological line, baskets get tighter. That’s real pressure on the everyday consumer Walmart knows best.

The GLP-1 angle is more interesting, and it’s the one that feels a little convenient as an explanation. So is it an excuse, or is something genuine happening in the grocery aisles?

Turns out, it’s mostly real just not the main reason for this particular earnings miss.

Walmart has been watching this for a while. Shoppers who pick up GLP-1 prescriptions at its pharmacies tend to leave with fewer food items and lower overall calorie counts in their carts. Independent research backs it up: households with at least one person on these drugs cut grocery spending by roughly 4–8% within months of starting. Snacks, sweets, baked goods, and carb-heavy staples take the biggest hits. People eat less, snack less, and often trade volume for higher-protein or “better-for-you” options. Some studies put the annual grocery savings in the hundreds of dollars per household. Multiply that by the growing number of users (already well into the double-digit millions in the U.S.), and you get a measurable drag on food retail.

Walmart has even quantified parts of it before. In previous years, the pure pharmacy sales of the drugs themselves delivered a nice tailwind—about 100 basis points to comps. That benefit is now shrinking as script growth gets offset by price and mix pressure. Separately, the new Medicare drug-price rules (maximum fair pricing) are slamming the pharmacy numbers hard this quarter, creating a clear headwind that’s bigger and more immediate than any food-spending slowdown.

So here’s the nuance: the reduced food spending is a legitimate, ongoing trend. It’s not made up. Food companies and grocery chains have been fretting about it for a couple of years for good reason. But pinning a big chunk of this quarter’s soft comps primarily on “people on weight-loss drugs are buying less chips” stretches it. The sharper, more quantifiable hits right now are the pharmacy price deflation and the fuel-related caution from consumers watching their gas tanks.

In other words, GLP-1 is a real issue for the food business long-term. It’s changing habits, shrinking some categories, and forcing retailers to rethink assortment toward protein, fiber, and smaller packs. But in the short term, it’s also a handy narrative when other headwinds—energy costs from geopolitical messes and regulatory changes on drug pricing—are doing more of the damage.

Walmart is still raising guidance and talking about price investments and share gains, so the business isn’t falling apart. The Ozempic effect is here to stay, though. Whether it’s the main villain this quarter or just one more thing on the list, the snacks aisle has already noticed.