Walmart may have started out as a retailer geared to budget-sensitive consumers, but its customer base is continuing to grow, thanks to more affluent shoppers.
The retailer saw share gains in new shoppers across income levels mainly led by upper-income households, which make more than $100,000 in annual income, Walmart officials said during an earnings call on Tuesday.
Walmart in a previous earnings call had also highlighted the rise in its higher income shoppers.
"Walmart has made gains among higher-income consumers off the back of its promise that it is an everyday low price retailer where consumers can maximize their budget and get bang for their buck because all income groups, whether they be low income, middle income or high income, have faced the prospect of punishing inflation over the past couple of years, especially in food," Neil Saunders, a retail analyst at the research and analytics firm GlobalData, told USA TODAY.
All consumers are looking for savings
While higher-income wage earners can absorb more of the price increases into their budgets than lower-income groups, "they still don't like to have to spend a small fortune on food and groceries. They still get sticker shock from seeing those things," he said.
Saunders said he thinks that once affluent shoppers have given Walmart a try to save money, "I think sometimes they've been pleasantly surprised because the Walmart of today is not quite the same Walmart of 10 or 20 years ago. It's still low price, but it has a more sophisticated offering. The stores look better. The customer service is better.
"So they've gone there for the low prices and enjoyed that, but they've kind of stuck around because they've said 'Actually, this isn't so bad,'" Saunders said.
Some stigma is gone from shopping at Walmart
Saunders said a stigma that may have previously existed among some shoppers when it came to shopping at Walmart has disappeared.
"The honest truth is that a lot of the things that Walmart sells are sold elsewhere," he said. "Why would you pay over the odds for exactly the same product just because you're being sniffy about the place where you're buying it? It just doesn't make a lot of sense."
Shoppers can also make purchases and get Walmart's low prices without ever setting foot in a store with Walmart's delivery and pick-up options, which the retailer has invested in heavily, Saunders said.
Affluent shoppers are mostly buying groceries at Walmart
Saunders said he continues to expect Walmart to gain more higher-income consumers, even with inflation moderating a bit, because people's budgets are still under pressure.