What’s going on here?
Walmart was cool, calm, and collected last quarter, with some expectation-smashing results.
What does this mean?
While peers like Home Depot and Target had their ups and downs this week, Walmart strode through with confidence – and that wasn’t down to luck. Its massive grocery arm, the biggest in the US, played a huge part. And even though sales of nice-to-haves were unimpressive, cash-strapped shoppers were all over Walmart’s own-brand foods – opting for home-cooked meals over pricier dine-outs. All said, customers were both visiting stores more often and spending more too: in fact, the number of transactions swelled by 2.9% last quarter, and the average bill climbed by 3.4% to boot. All that momentum pushed same-store sales beyond forecasts, driving both revenue and earnings over target too. And to sweeten the deal, Walmart raised its annual profit outlook, sending investors into a tizzy.
Why should I care?
The bigger picture: Prime opportunity.
Walmart’s secret weapon in the market-share battle is the Walmart+ membership. For under $100 a year, members enjoy discounts and perks like free food delivery on orders over $35. And that membership isn’t just retaining customers: it’s making them spend more too. Ever since Walmart amplified its marketing efforts last year, the program’s growth has skyrocketed. And with its novelty, there’s ample room to expand – potentially giving pricier services like Amazon Prime a run for their money.
Zooming out: Ad-vantage Walmart.
Walmart’s pushing into other areas too, but not with a new gizmo or nibble this time: it’s actually advertising. After all, the firm’s got nearly 5,000 stores across the US, and about 90% of Americans live within 10 miles of one – meaning that Walmart sees a massive daily influx of customers. Capitalizing on that, the retail giant’s planning to ramp up its in-store ad space sales. Think ads on screens, checkouts, and aisles, as well as radio spots and sample stations.
