My M-I-L owned a fabric store for many years and would complain long and loud about the chain stores and their prices as compared to the quality. Evidently, JoAnn's has A, B, & C stores with comparible fabric quality. Most were C stores, but I have noticed them bringing in some higher quality fabrics. And they are charging prices that seem to be either comparable or a bit higher than the local quilt shops.
All the stores have buyers that go to the markets. Of course, the larger chain stores can purchase in giant lots for a much greater discount so the fabrics at JoAnn's and Walmart are bound to come from the same companies.
The other thought is, as some one else mentioned, they may be leasing space to a fabric vendor much like JoAnn's leases to a sewing machine vendor.
A new super Walmart just opened not far from me, but they don't have a fabric department - bummer. Just a handful of yarns, but great groceries!