The top man at Walmart (NYSE:WMT) says the American shopper is still feeling “stressed” by inflation, but the effects aren’t being felt evenly across categories.
Walmart CEO Doug McMillon said Tuesday shoppers are being more selective about their purchases, McMillon said, and skipping some electronics, for example, in favor of staples. In the last couple quarters, he said much of company’s growth has come from people who are going to Walmart to save money.
Walmart is among a slew of retailers that has seen a shift in shopping patterns as inflation drives up the price of food, housing and more.
For the big-box retailer, that has led to challenges and opportunities. As the nation’s largest grocer, Walmart has used low-priced groceries to attract customers — including wealthier ones. About 75% of its market share gains in grocery came from shoppers with an annual household income of more than $100,000 in the past two quarters.
Walmart updated its forecast this summer to reflect that dynamic. It cut its profit outlook in July, as it aggressively marked down some merchandise and as consumers bought fewer high-margin discretionary items. But it raised its comparable sales projection because of stronger-than-expected grocery sales.
Last month, it gave a more cautious outlook than Wall Street expected. Walmart said it anticipates comparable sales for Walmart U.S. will rise about 3%, excluding fuel, in the holiday quarter. That was below Wall Street’s expectations of 3.5% growth.
WMT shares shed 12 cents to open Tuesday at $151.53.
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