New York (Reuters) -Inflation in the U.S. is at its highest level in four decades, and it has hurt low-income people the most. Walmart’s (NYSE:WMT) earnings report on Tuesday showed that even people with bigger wallets are feeling the pinch. The biggest store in the country, Walmart, caters to shoppers who want to save money. During the second quarter, more customers with middle-and high-incomes shopped there, which was different from other times when the economy was bad. “In Walmart’s U.S. business, we’ve seen people with middle-level to high-level incomes come to the store looking for good deals.
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As you might expect, they try to save money on things like food and other things they use every day, “Doug McMillon, the CEO of Walmart, said on a call with investors. The store in Bentonville, Arkansas, saidhttp://www.cnbc.com/2022/08/16/walmart-wmt-earnings-q2-2023.html During the second quarter, which ended on July 31, the company grew its market share in the grocery business. Three-quarters of the growth came from shoppers with annual incomes of over $100,000. The company didn’t give any more information about its gains in market share. Most of these sales came from its e-commerce business in the U.S., which grew by 12% during the quarter. This helped the retailer have better-than-expected sales and raise its profit forecast for the whole year.
In the US, Walmart’s share of the online grocery market, which includes both pickup and delivery services, went up from 52% in March to 55% in June.
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In contrast, online grocery delivery service Instacart’s share went down from 28% to 27%, Amazon’s share went down from 8% to 7%, and Kroger’s share went down from 9% to 8% during the same time period.
The data also showed that Target’s (NYSE:TGT) online delivery service, Shipt, lost market share during the time frame. Walmart’s U.S. Chief Executive, John Furner, said on an investor call that this economic downturn is different from the 2008-2009 recession, when the company had a smaller e-commerce business and didn’t offer many of the services it does now. He said that the Walmart InHome business, which delivers groceries right to a customer’s refrigerator, in-store pickup, and delivery from stores, were key to attracting higher-income customers. Furner also said that the Walmart+ membership programme, which has been around for almost two years, helped bring in some of the new customers.
Walmart + costs $98 per year, while Amazon Prime costs $139 per year. Walmart+ offers benefits like free delivery on all orders over $35 and discounts at gas stations. “We were able to serve customers in a much more flexible way than we could have 13, 14 years ago,” Furner said. “There are definitely a lot of ways we can serve customers now that just didn’t exist the last time we were in a recession.” CFO Rainey said that the store is “more relevant” to more people now that it lets third-party sellers sell goods on Walmart.com.
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There are now more than 240 million products on its website, up from 10 million five years ago.
Rainey said, “As we add new products, we become more useful to a wider range of people.” “It’s pretty important growth.” And because of that, we want to sell more general goods to more households, including those with higher incomes.“
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