Strong first-quarter earnings for Walmart are tempered by signs of caution in consumer spending, as the retailer tries to retain value customers and higher-end shoppers as well, according to industry analyses.
The 5.7 percent sales increase and 12.9 percent adjusted profit increase over last year’s Q1 showed dips in non-discretionary categories, analysts noted.
The earnings follow Walmart’s announcements that they would lay off several hundred corporate positions, and relocate others from offices in Dallas, Atlanta and Toronto. Most of the relocations will be to the company HQ in Bentonville.
Remote work is also being curtailed.
Walmart continues to battle for both value and affluent customers. While many reports highlight the retailer’s competition with Amazon, Walmart’s own new Bettergoods private brand is already showing promise.
In the ice cream sector, Bettergoods products outsold the traditional Great Value house brand among younger shoppers. However, 71 percent of purchasers weren’t aware that Bettergoods was a house brand.
Non-perishable items, however, are hurting as consumers increasingly purchase via CPG subscription services, including Amazon. That’s true both in grocery categories and in shelf stable products including home goods and health categories, where Amazon has pulled market share from Walmart in recent years.
In news from other big retailers, Uber has responded to recent partnerships by rivals Instacart and Doordash by expanding their deal with Costco to offer Costco delivery via UberEats in selected locations in the US, Canada, Mexico and Japan. More locations are planned.
Grocery chain Kroger has partnered with Yahoo to bring advertising from Yahoo DSP into Kroger Precision Marketing, operated by retail media outlet 84.51 and owned by Kroger.
