[Baltimore Sun] Walmart wins big as $100k earners boost sales, proving value is key in inflation fight
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Households with six-figure incomes are driving sales growth at Walmart. The nation’s largest retailer reported third-quarter results Tuesday, showing same-store sales growth of 5.3%.
CEO Doug McMillon said during an earnings call that Walmart continued to gain U.S. market share in both grocery and general merchandise.
“Households earning more than $100,000 made up 75% of our share gains,” McMillon said. “In the U.S., in-store volumes grew, curbside pickup grew faster, and delivery sales grew even faster than that.”
McMillon credited improved shopper convenience for helping spur sales.
Walmart Chief Financial Officer John David Rainey noted that general merchandise and consumables were “deflationary” during the quarter, while food prices experienced low single-digit inflation.
“We’re seeing higher engagement across income cohorts, with upper-income households continuing to account for the majority of our share gains,” Rainey said.
Though inflation has cooled considerably in the last two-plus years, affordability challenges persist.
The consumer price index, a widely used inflation gauge published monthly by the government, peaked at 9.1% annually in June 2022. The latest reading was 2.6%.
Meanwhile, wages are now outpacing inflation, with the Atlanta Fed’s tracker showing 4.6% median wage growth.
Bankrate Senior Economic Analyst Mark Hamrick noted that $100,000 doesn’t stretch as far as it used to, and affordability struggles are not limited to lower-income households.
The median household income reached $80,610 last year, up 17% since 2019, but still hasn’t caught up to 2019 levels on an inflation-adjusted basis.
“Where businesses can do well these days is where they’re providing either the perception of value or actual value,” Hamrick said. “And Walmart has always been regarded as being hyper-focused on value.”
Inflation was a key issue for voters in the recent election.
Surveys from The Associated Press showed that high prices for gas, groceries and other goods were important to 87% of voters. Just 13% of voters said they were getting ahead financially, while the majority said they were either falling behind or holding steady.
Among a list of key issues that included immigration, abortion, crime and climate change, 39% of voters identified the economy and jobs as the top concern.
“Right now, value is the name of the game in both retail and hospitality,” Hamrick said. “It’s not the only game, but it’s an important game. And Walmart’s been delivering on that.”
While Walmart posted solid growth, competitor Target fell short of third-quarter sales expectations.
Hamrick noted that inflation won’t always dominate Americans’ concerns, which could pose a challenge for Walmart’s growth. He also pointed to Walmart’s reliance on imported goods as a potential vulnerability in “an environment where tariffs appear to be some kind of certainty.”
Have a news tip? Contact Cory Smith at corysmith@sbgtv.com or at x.com/Cory_L_Smith. Content from The National Desk is provided by Sinclair, the parent company of FOX45 News.
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