Business
Walmart’s Business Surges As Shoppers Hunt For Low Prices
Businesses ranging from McDonald’s to Home Depot are battling to attract financially challenged customers. However, Walmart is expanding as customers seek low-cost groceries, necessities, and other items.
Walmart reported Thursday that sales at locations open for at least a year grew 3.8% over the previous year. The company upped its sales and profit guidance for the year, indicating that it expects growth to continue.
VOR News Image
Walmart’s Business Surges As Shoppers Hunt For Low Prices
According to retail analysts, the largest retailer in the United States has leveraged its size and purchasing power to keep prices lower than competitors despite rising inflation since the outbreak.
Groceries account for more than half of Walmart’s sales, and analysts at Evercore IRI say the company has profited from its pricing advantage, with prices that are approximately 25% lower than traditional supermarkets.
While low—and middle-income customers have traditionally made up the majority of Walmart’s customer base, the company has expanded to include people earning more than $100,000 per year. It stated that its growth last quarter was “primarily driven by upper-income households.”
VOR News Image
Walmart’s Business Surges As Shoppers Hunt For Low Prices
“Most Americans remain uncomfortable with food prices and are still actively looking for ways to keep their spending in check,” Neil Saunders, an analyst at GlobalData Retail, said in a note to clients Thursday. This has benefited “Walmart’s favor and has allowed the chain to continue to acquire new customers.”
Meanwhile, department stores, home improvement retailers, and other retail groups have suffered as buyers tighten their belts. Fast-food restaurants have also struggled.
Retail sales have declined overall in recent months.
The business stated this week that Home Depot’s sales at locations operating for at least a year declined 2.8% last quarter. McDonald’s reports that some lower-income Americans are eschewing the restaurant in favor of cooking at home.
VOR News Image
Walmart’s Business Surges As Shoppers Hunt For Low Prices
“It’s a challenging consumer environment,” said Ian Borden, McDonald’s CFO, stressing that many people are struggling with inflation, rising interest rates, and shrinking savings.
SOURCE – (CNN)
