The Ratings Game: Walmart is getting more popular with higher-income shoppers

by | Feb 22, 2023 | Stock Market

With prices of goods still high, more higher-income U.S. shoppers are turning to big-box discount chain Walmart Inc. for relief — a trend some analysts see persisting in the months ahead. And while Walmart’s
financial outlook, issued this week, was weaker than expected, executives said wealthier shoppers were driving market-share gains.

“We’re gaining share across income cohorts, including at the higher end, which made up nearly half of the gains we saw in the U.S. again this quarter,” Walmart Chief Executive Doug McMillon said on the retailer’s fourth-quarter earnings call on Tuesday. “And we’re also capturing a greater share of wallet at Sam’s Club in the U.S. with both mid- and higher-income shoppers.” He added that online ordering and delivery options broadened Walmart’s appeal to those customers. Later in the call, Chief Financial Officer John Rainey said higher-income customers had driven “nearly half” of Walmart’s market-share gains in groceries, where greater demand has helped kept prices elevated, even at discount stores. Rising prices over the past year have forced more consumers to focus their spending on basics, like groceries. But as those essential purchases vacuum up consumers’ savings, retailers have had to cut prices on less essential goods, like clothing and electronics, to get shoppers to buy. Walmart’s growing appeal among wealthier shoppers was one reason BofA analysts kept their buy rating on Walmart’s stock. “We see support for this …

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