Walmart continued to assert its grocery dominance during the third quarter, gaining market share in food and beverage and seeing growing interest from higher-income shoppers, the retailer announced Tuesday.
Walmart’s same-store sales increased 8.2% during the period, but grocery sales saw growth in the “mid-teens”, the company said. It also reported year-over-year growth in food units sold, after a slight decline in the previous quarter.
The strong performance prompted Walmart to raise its guidance for 2023.
Inflation fueled a 130-basis point increase in Walmart’s private brands penetration, the company said, as shoppers trade down to cheaper products in categories such as protein and pet food. Dry grocery continues to see significant inflation, the company said.
Walmart noted during its second-quarter earnings report in August that consumers making more than $100,000 a year were increasingly turning to the Bentonville, Arkansas-based retailer in search of low prices. It’s a trend that has persisted during the year, the company noted.
Three-quarters of Walmart’s grocery share gain during the third quarter came from those higher-income shoppers, CFO John David Rainey told analysts.
“Our purpose of saving people money has never been more important,” Rainey said.
For the third quarter ended Oct. 31, Walmart reported revenue of $152.81 billion globally, significantly beating the expected $147.75 billion. Revenue grew 9.8% during the period.
It was also a big quarter for Walmart’s membership club, Sam’s Club. That retailer’s same-store sales jumped 10% or 23.9% on a two-year stock. Sam’s Club membership income increased 8%, with member count reaching a record high.
Walmart’s U.S. ad sales business, Walmart Connect, grew 40% during the quarter.
Digital sales grew to 16% of sales or 24% on a two-year, stacked basis.
“We’re focusing on earning repeat business from customers shopping with us more frequently than before,” CEO Dough McMillon told analysts. “We like where our price gaps are.”
For 2023, Walmart is forecasting same-store sales growth of about 5.5%.