U.S. grocery prices are not rising at the level they were last year, when food price inflation hit record highs, but Americans continue to be concerned the overall economy and their personal finances.
Walmart’s longstanding focus on value, however, has helped it – along with other value-driven grocery chains – thrive within the current high inflationary environment, in which consumers are growing more cost-conscious, Insider Intelligence Senior Analyst Zak Stambor told SeafoodSource.
“Walmart grocery and wellness sales help insulate it from consumers’ pullback in discretionary spending,” Stambor said. “[Rising grocery prices] have driven younger and higher-income consumers to give Walmart a try, which has helped it grow its dominant share of the U.S. grocery market.”
Bentonville, Arkansas, U.S.A.-headquartered Walmart’s strong e-commerce growth shows it is “winning over shoppers who are looking for convenience with its range of pickup and delivery options,” Stambor said.
Overall e-commerce grocery sales fell 1.1 percent in the company’s second fiscal quarter compared to the same period a year ago, but pickup and delivery orders increased.
“The combined effect of price inflation and the expiration of Covid financial support has triggered a flight-to-value as purchasing power remains under pressure,” David Bishop, a partner at retail data site Brick Meets Click, said in a press release. “This means it’s vital for grocers to offer customers more ways to save money while also providing the experience that online shoppers expect, as cost considerations will weigh more heavily than convenience for cash-strapped households in the second half of this year.”
Walmart recently reported an overall global consolidated revenue hike of 5.7 percent to USD 161.6 billion (EUR 150 billion) in its fiscal second quarter and a 6.4 percent hike in Walmart U.S. comparable sales. Its e-commerce sales surged 24 percent in the quarter.
The grocery business is a central cog in Walmart’s offerings, helping it steadily grow membership in its Walmart+ program and providing more digital advertising space to bolster its retail media business, Stambor said.
The chain accounted for nearly 36 percent of all U.S. online grocery sales in the second quarter of this year, up more than 5 percent from the prior year and its highest share of nationwide online sales to date, according to a Brick Meets Click report.
Walmart is not only capitalizing on actual food inflation with its focus on value, but the chain is also benefiting from ...
Photo courtesy of Brick Meets Click
