New York
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Walmart is proving to be America’s antidote to the cost of living crisis.
A growing number of Americans are heading to Walmart for groceries and clothing as inflation and high prices squeeze their budgets: Walmart’s business in the United States is surging and it’s gaining market share from rivals, the company said Thursday in its quarterly financial report.
Walmart has used its massive size and scale to drive down prices and pour billions of dollars into investments such as raising wages, sprucing up stores and building a logistics network for online shopping.
These investments are paying off for Walmart at a moment when many Americans’ finances are stretched.
Last quarter, Walmart’s US sales increased 4.5%. Walmart saw an uptick in customer trips to stores, and shoppers spent more when they visited. Walmart also raised its sales and profit guidance, signaling it expects a strong holiday shopping season.
Walmart’s gains have been led by middle-class and upper-income households turning to its stores and website to try to save money.
“We’re gaining market share, improving delivery speed, and managing inventory well,” Walmart CEO Doug McMillon said in a news release. “We’re well positioned for a strong finish to the year and beyond that.”
McMillon announced Friday that he’s retiring soon as CEO after 11 years. He’ll be succeeded in February by John Furner, who heads Walmart’s US operations.
Gains against Target and dollar stores
Walmart is gaining over Target in particular. Target’s sales have stagnated for around four years.
One major advantage Walmart has over Target is its grocery business.
Shoppers make frequent trips to stores to pick up groceries, and Walmart has made improving its produce section a top priority in recent years. The company has also narrowed the gap with Target on apparel and home goods.
As shoppers tighten their spending, more are choosing Walmart over Target.
Walmart has also peeled off lower-income customers from Dollar General and other discount stores.
