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I walk around a little edgy already
Americans are still shopping. They’re just going to Walmart
By Nathaniel Meyersohn, CNN3 minute read
Updated 9:34 AM EDT, Thu August 15, 2024
57 comments
A Walmart Superstore in Secaucus, New Jersey, Thursday, July 11, 2024.
Eduardo Munoz Alvarez/AP
New YorkCNN —
Americans are cutting back on Disney parks, Big Macs and Starbucks coffee. But they keep shopping at Walmart.
Walmart’s US sales at stores open for at least one year increased 4.2% last quarter and its operating income surged 8.5% during the quarter. Walmart’s US digital sales are booming: They grew 22%.
The company raised its sales and profit guidance for the year, a sign it expects its strong growth to continue. Walmart’s (WMT) stock surged 7% during pre-market trading Thursday.
Walmart is America’s largest retailer and a gauge of consumer sentiment. The company reaches a broad swath of consumers, and its business is steady in most economic conditions.
But shoppers are looking for deals after years of higher prices and interest rates and now a slowing job market. Although inflation has fallen to its lowest level in three years, Americans are still paying more than they were for groceries, housing and many goods.
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That has put Walmart in the sweet spot.
As customers have scoffed at $6 iced coffee at Starbucks, $15 Big Mac meals at McDonald’s and other items, they’re buying groceries, household essentials and other products at Walmart because they feel they are getting good value for their money.
“We aren’t experiencing a weaker consumer overall,” Walmart CEO Doug McMillon said on a call with analysts. “Customers from all income levels are looking for value and we have it.”
Groceries account for more than half of Walmart’s sales, and Walmart has benefited from its pricing advantage— Walmart’s prices are around 25% lower than traditional supermarkets, according to analyst comparisons.
Walmart said its overall prices at stores and Sam’s Club were down slightly from a year prior. It also temporarily dropped prices — known as “rollbacks” — on 7,200 select items. Walmart is not the only retailer cutting prices. Target, Walgreens and other chains are slashing prices too. These retailers are cutting prices to try to draw back customers.
Does the Coli agree?
People are shopping at Walmart more and more? No that can't be right.
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