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Thursday, November 17, 2022

Wal-Mart's New, Wealthier Customers

 Has been happening for a while:

Can Walmart hold onto the new, wealthier customers it is picking up?

by George Anderson  in Retailwire

Walmart’s savings message is resonating with Americans across income levels and helping the company dramatically reduce its inventory in the process.

The retailing giant’s U.S. business reported an 8.2 percent year-over-year jump in sales during the third quarter as the retailer rang up increases in both average ticket and transaction size. Shopper visits to the retailer’s stores increased 2.1 percent. E-commerce sales were up 16 percent.

Walmart’s gains were largely driven by grocery.

“We’ve continued to gain grocery market share from households across income demographics, with nearly three-quarters of the share gain coming from those exceeding $100,000 in annual income,” said John David Rainey, executive vice president, chief financial officer, Walmart, on the company’s Q3 earnings call. “This quarter, our private brand penetration in food categories increased about 130 basis points, reflecting customers’ increased focus on quality products at value prices. We observed incremental trade down in categories, including proteins, baking goods, baby and dog food.”

Walmart CEO Doug McMillon said that a combination of the right products inside and outside of grocery, value prices and the retailer’s broad suite of  shopping and fulfillment options will enable it to hold onto new customers it has acquired in 2022.

John Furner, president and CEO of Walmart U.S., said the chain is seeing an increase in digital engagement with its customers. Walmart app downloads have continued to grow, as has the number of users. Shopping frequency has picked up.

“For a long time, we talked about the value of a store customer plus shopping on e-com, how much more valuable that was,” said Mr. Furner. “We see that accelerate when it’s pickup, e-commerce and stores. So, you know, going forward, you’re going to hear from us talk about this more and more as an omni offer, which is really flexible for the customer.”  ... ' 

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