Walmart has low prices because they artificially extort them from suppliers. That is not to say Walmart puts a gun to the head of suppliers, but if you want to supply Walmart, you have to agree to minuscule profit margins or they will replace you with a company who will so agree. I’m not going to quite say it is artificial price fixing, as the suppliers are willingly agreeing to Walmart’s demands for below market wholesale prices. Just saying that the 800 point gorilla has enormous leverage over suppliers.
You are right that volume is part of the reason for Walmart’s low prices, but it is also because Walmart is ruthless at attaining ridiculously low wholesale prices from their suppliers, which is why suppliers hate them so.
Walmart: We will buy this product at six cents per ounce.
Colgate Palmolive: But it costs us eight cents per ounce to make it.
Walmart: As I said we will buy this product at six cents per ounce.
Consumer: Hey, this stuff is not as good as it used to be. What? Do they water it down these days?