Virtually no one is safe from inflation, especially with consumer prices at their highest levels in 40 years.
Even America’s wealthiest families fall victim to it in one way or another.
As they seek refuge from price increases, this group is increasingly turning to Walmart, America’s largest value option.
Chief Financial Officer John David Rennie told CNBC on Tuesday that the retail giant’s reputation for low prices is driving more middle- and high-income shoppers to its shelves.
Rainey estimated that nearly three-quarters of Walmart’s grocery market share came from customers whose annual household income is $100,000 or more.
“Obviously, they’re stressed out by high gas prices, high food prices, and even housing,” Rainey said.
Rainey said shoppers value the hunt “in terms of quality and quantity,” choosing smaller grocery packages and buying items like canned tuna and beans instead of cured meats and beef. And they’re increasingly using credit over debit cards, he said.
Even if food prices continue to rise if the national average gasoline price falls below $4 a gallon, food prices rose 13.1% in July — the largest monthly increase since 1979.
CEO Doug McMillan said in the company’s earnings announcement, “We’re excited that more customers are choosing Walmart during this inflationary time, and we’re working hard to help them prioritize their spending.”
Walmart said it continues to experience an inventory glut in certain categories, such as apparel and electronics, to the benefit of consumers. The company said earlier this summer that demand for those goods during the pandemic meant it ended up ordering more than it needed, creating discount opportunities for shoppers.
On Tuesday, Walmart executives said the company is still working to sell additional quantities.
“We made and continue to make good operational progress during the quarter to improve costs across our supply chain,” said McMillan.