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Walmart in New Jersey.
new york
CNN
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Companies from McDonald's to Home Depot are struggling to attract financially strapped shoppers. But Walmart is growing as consumers seek cheaper groceries, essentials and other goods.
Walmart said Thursday that sales at stores open at least a year rose 3.8% in the most recent quarter compared to the same period last year. The company raised its sales and profit forecasts for this year, a sign that it expects growth to continue.
Retail analysts say the nation's largest retailers are using their size and buying power to keep prices lower than their competitors, even as inflation has soared since the pandemic.
Groceries account for more than half of Walmart's sales, and Walmart benefits from a pricing advantage of about 25% lower than traditional supermarkets, according to Evercore IRI analysts.
While low- and moderate-income shoppers have traditionally formed the core of Walmart's customer base, Walmart has also seen growth in people making more than $100,000 a year, and last quarter's profits were “primarily high “It was brought about by income households.”
Walmart also makes money online. Digital sales, which include curbside pickup and delivery, rose 22% last quarter.
“Most Americans remain uncomfortable with food prices and are still actively seeking ways to rein in spending,” GlobalData Retail analyst Neil Saunders said in a note to clients Thursday. “There is,” he said. This “worked to Walmart's advantage, allowing the chain to continue attracting new customers.”
Meanwhile, department stores, home improvement stores and other retail sectors have been hurt by customers leaving the market due to their shopping sprees. Fast food chains are also struggling.
Retail sales have been declining across the board in recent months.
Sales at Home Depot stores open for at least a year fell 2.8% last quarter, the company said this week, but some low-income Americans are rejecting that. McDonald's has chosen to cook at home instead, according to McDonald's.
“It's a tough consumer environment,” McDonald's Chief Financial Officer Ian Bowden said, noting that many consumers are trying to cope with inflation, rising interest rates and declining savings.
