Bentonville, AR-based Walmart Inc. says higher income shoppers continue to increase trips to the company’s stores, particularly for its lower-cost groceries.
The company reported its third-quarter 2023 earnings on Nov. 15, with same-store sales up 8%, and e-commerce up 16%. The company also noted that food sales are up in units and not just dollars.
CEO Doug McMillon noted in the company’s second quarter earnings report that it is seeing more higher-income shoppers choosing Walmart for groceries. That trend continued in the third quarter.
“We see this in our grocery business in stores and online in key markets like the U.S. and Mexico,” he said, during the company’s earnings report call. “Customers that came to us less frequently in the past are now shopping with us more often, including higher-income shoppers.
John David, executive vice president and CFO, said the company is gaining grocery market share from “households across income demographics, with nearly three quarters of share gain coming from those exceeding $100,000 in annual income.”
Those higher income customers aren’t necessarily coming to Walmart outside of grocery and consumables.
“Just about everybody, if I think about the U.S., and it’s probably true in Mexico and other places, too, shops at Walmart at some point,” McMillon said. “A lot of people may come to us for Tide or come to us for bananas, but they may not buy a t-shirt or a sweater.”
But as inflation hits their wallets harder, they may start to shop across the store.
“During a period of time when people are more sensitive to price, it makes sense that they would increase the amount of their wallet that would be coming to Walmart because of value,” he said.
McMillon said the challenge now is to keep them.
“I think some things…like pick up and delivery help,” he said. “But as I mentioned in my remarks, fresh food and apparel are other areas, home’s another one, where if we can stand tall during this period of time, we think they’ll keep coming back to us because we do have quality, we do have value, and we’ve created a lot more ways for them to save time in the store, and pickup and delivery.”