(News Bulletin 247) – The American distribution giant has benefited from its competitiveness in a context of high inflation in the United States which is eating away at household purchasing power.

With inflation, the US supermarket chain Walmart has capitalized on its reputation as a low-cost retailer, attracting more budget-constrained consumers to its shelves due to rising prices.

The retail giant saw its revenue jump 7.6% in the three months from February to April, the first quarter of its fiscal year, to $152.3 billion, and raised its forecast slightly for 2023.

Sales were driven by the 4.4% increase in the price of the average amount paid by customers in Walmart stores in the United States, but also by an increase in the number of transactions.

Market share gains

The group, which manages around 10,500 stores, points out that it has gained market share in food sales, including among wealthier and younger households.

With high inflation and a slowing economy, some consumers are more likely to turn to lower priced establishments.

The Home Depot and Target retail chains unveiled lower results on Tuesday and Wednesday, including a drop in big spend for an item.

“Customers continue to seek added value given the impact of inflation. We are seeing this in the United States and other markets like Mexico, Canada and Chile,” the Walmart boss said. , Doug McMillan, during a conference call.

His chain has seen its sales increase above all in food and hygiene products, and on its own brand products, which are less expensive.

In addition to general inflation, Walmart customers “have also been affected by lower government food stamps and lower tax refunds,” Chief Executive John David Rainey said during the meeting. conference.

Sales target raised

“The good news is that new shoppers seem to be sticking with Walmart – at least for now – but the less good news is that their business is mostly limited to food and necessities,” observed Neil Saunders, distribution sector specialist for GlobalData.

“Few of them cross the aisle to buy” items like appliances or clothes, he added.

However, the latter generally generate higher margins.

Boosted by consumer interest in its offer, which is considered cheap, Walmart now expects its sales to rise by 3.5% for the whole year, against 2.5% to 3% previously.

“Great uncertainty continues to loom over the remainder of the year with consumers increasingly dealing with macroeconomic pressures, which is why we continue to take a cautious approach in our outlook,” the CFO said.

The supermarket chain also expects adjusted earnings per share for 2023 to be somewhat higher than before (expected between $6.10 and $6.20 compared to $5.90 and $6.05 previously)

In the first quarter, the group saw its operating profit increase by 17.3%.

Its net profit, on the other hand, fell by 18.5% to 1.68 billion dollars: Walmart paid more for interest, in the wake of the rise in rates initiated by the American central bank, and recorded losses on investments in other companies.

The action rose 2.3% around 4:10 p.m.

(With AFP)