The Gilroy, CA Walmart sometimes has a great oil selection and sometimes not. Often the automotive department is a mess. Mostly I find that I can get better pricing by taking advantage of sales at NAPA or Kragen.
I don't think that the real auto parts stores have much to fear from Walmart, but perhaps the PepBoys & Kragen chains could be loosing some business to them. Kragen in particular pushes Fram filters and at much higher prices than Walmart, and PepBoys seems to focus on installed sales of house brand tires and the like more than anything else.
The real auto parts stores have plenty to fear, but Walmart isn't their real threat.