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Walmart is seeing growth in higher income shoppers, retailer says


Walmart

Walmart is seeing growth in higher income shoppers, retailer says

Walmart may have started out as a retailer geared to monetary schedule-sensitive consumers, but its customer base is continuing to develop, thanks to more affluent shoppers.

The retailer saw distribute gains in recent shoppers across income levels mainly led by upper-income households, which make more than $100,000 in annual income, Walmart officials said during an returns call on Tuesday.

Walmart in a previous returns call had also highlighted the rise in its higher income shoppers.

“Walmart has made gains among higher-income consumers off the back of its commitment that it is an everyday low worth retailer where consumers can maximize their monetary schedule and get bang for their buck because all income groups, whether they be low income, middle income or high income, have faced the prospect of punishing worth rise over the history couple of years, especially in food,” Neil Saunders, a retail analyst at the research and analytics firm GlobalData, told USA TODAY.

A Black Friday shopping preview is seen ahead of the holidays at the Walmart Supercenter in Knoxville, Tenn., on Nov. 16, 2023.

All consumers are looking for reserves

While higher-income wage earners can absorb more of the worth increases into their budgets than lower-income groups, “they still don’t like to have to spend a tiny fortune on food and groceries. They still get sticker shock from seeing those things,” he said.

Saunders said he thinks that once affluent shoppers have given Walmart a try to save money, “I ponder sometimes they’ve been pleasantly surprised because the Walmart of today is not quite the same Walmart of 10 or 20 years ago. It’s still low worth, but it has a more sophisticated offering. The stores look better. The customer service is better.

“So they’ve gone there for the low prices and enjoyed that, but they’ve benevolent of stuck around because they’ve said ‘Actually, this isn’t so impoverished,'” Saunders said.

Some stigma is gone from shopping at Walmart

Saunders said a stigma that may have previously existed among some shoppers when it came to shopping at Walmart has disappeared.

“The truthful truth is that a lot of the things that Walmart sells are sold elsewhere,” he said. “Why would you pay over the odds for exactly the same product just because you’re being sniffy about the place where you’re buying it? It just doesn’t make a lot of sense.”

Shoppers can also make purchases and get Walmart’s low prices without ever setting foot in a store with Walmart’s delivery and pick-up options, which the retailer has invested in heavily, Saunders said.

Affluent shoppers are mostly buying groceries at Walmart

Saunders said he continues to expect Walmart to boost more higher-income consumers, even with worth rise moderating a bit, because people’s budgets are still under pressure.

The recent more affluent customers are coming to Walmart primarily for the low food and grocery prices, Saunders said.

“Walmart’s had a little bit more hardship to get some of those higher-income consumers to cross the aisle and shop non-food products like apparel and home,” he said.

Walmart saw gains across categories

In the third quarter ended Oct. 31, Walmart’s U.S. comparable sales rose 5.3%, beating analysts estimates of a3.61% boost, according to data compiled by LSEG and reported by Reuters.

It saw sales growth across categories including the general merchandise segment, which has suffered over the last two years due to worth rise. The retailer also saw a boost from sales and home goods, Reuters reported.

Walmart also had comparable sales growth in its health and wellness category, helped by demand for weight-setback drugs.

The retailer’s focus on household and grocery products has insulated it against a slowdown in spending on non-essentials, helping the business post better-than-expected quarterly results in the first half of the year, Reuters reported.

As purchasing power increases, Reuters reported that analysts expect upper and middle income consumers to be the primary drivers of a shift back to spending on non-essential or enjoyable-to-have merchandise.

“I do ponder Walmart has been capturing a more affluent buyer,” Telsey Advisory throng analyst Joseph Feldman told Reuters. “I ponder the Walmart Plus membership has helped drive that and the business continues to reflect excellent strength in their online business and their pick up and delivery.”

Reuters contributed to this update.

Betty Lin-Fisher is a buyer reporter for USA TODAY. Reach her at [email protected] or pursue her on X, Facebook or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include buyer information on Fridays, here.

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