Walmart’s business in the United States is thriving, with an unexpected increase in market share in the last quarter. Surprisingly, Walmart’s success is mainly attributed to “high-income families.” Families with annual incomes exceeding $100,000 account for 75% of the company’s revenue.
On Tuesday, Walmart reported that sales at its stores in the United States open for at least a year increased by 5.3% compared to the same period last year, with a profit growth of 8.2% in the last quarter. Walmart has raised its financial outlook, expecting strong growth in holiday shopping.
The stock price of this retail giant hit a new high on Tuesday morning, rising by over 3% after announcing its earnings results. The stock has been hitting new highs over the past two months.
Traditionally, low-income and middle-income shoppers have been Walmart’s core customer base, flocking to Walmart to save on expenses. However, in recent years, Walmart has also expanded its customer base to include those with annual incomes exceeding $100,000, who have historically been Amazon’s main customer base.
As the world’s largest retailer, Walmart has attracted high-income customers by investing in its supermarket business and leveraging its immense scale to lower prices. It has also diversified its range of products including clothing, electronics, home goods, and other items.
Walmart has also built a strong online business to compete with Amazon. It has expanded options for online purchases and in-store pickup through thousands of stores and its Walmart+ same-day delivery membership program. Walmart’s online sales in the United States grew by 22% in the last quarter.
Doug McMillon, Walmart’s CEO, stated during Tuesday’s earnings conference call, “As we increase the variety of products available online, we can attract more people, especially higher-income customers who value time savings. Those with higher incomes who want to save time appreciate our practices in self-pickup and delivery.”
Walmart’s growth indicates that consumers across all income levels are seeking affordability and value in products. Despite a cooling inflation rate, high prices have burdened Americans in recent years.
While Walmart is thriving, many other retailers are struggling.
Since the pandemic devastated the industry in 2020, chain stores are expected to close more stores in 2024. Companies like Family Dollar, Walgreens, and Big Lots are shuttering thousands of stores.
The increase in store closures this year is attributed to companies raising prices to levels many consumers cannot afford, as interest rates soar, making the cost of borrowing for major purchases, mortgages, or car loans higher.