Walmart captures grocery share with a value offer that appeals to consumers during rising inflation

The retail giant announced Tuesday that its grocery sales grew 6% or about $2.6bn year-over-year and $5.5bn on a two-year stack in its second quarter ending July 31. ​This helped to drive up the company’s US total revenues 5.3% to $98.2bn and overall revenue 2.4% to $141bn – beating out expectations it would hit $137.17bn in overall revenue in the period.

The strong turnout also allowed the company to raise its guidance for the year with consolidated net sales now expected to increase 6% to 7% versus prior guidance of low- to mid-single digits, and operating income to increase 11.5% to 14% rather than the previously predicted high-single-digit growth. Full year earnings per share is now expected to be in the range of $6.20 to $6.35.

Broad product mix, strong inventory help keep prices down

While Walmart’s grocery segment benefited from “modest ticket inflation,”​ CEO of Walmart US John Furner touted the company’s ability to keep prices low and value high as a key contributing factor to the business’ success and ability to gain market share in grocery in Q2.

He explained that Walmart has seen some inflation in the low-single digits, but it was able to keep price value above where it was before the pandemic by leveraging its product mix to drive business across apparel, home, general merchandise and food, and by maintaining a strong inventory that will allow it to maintain price and position well into the coming year, he said.

By holding prices down and value high, Furner stressed multiple times that Walmart was able to drive unit growth faster than dollar share in grocery – indicating the retailer’s ability to “position ourselves well in terms of retail value for the consumer and play a key role in keeping inflation down the country.”



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