Walmart success story: Why the retailer’s shares and sales are up in 2023
The shares of Walmart, the world’s largest retailer, are riding a 52-week high after a 13% year-to-date rise. What accounts for the company’s advance?
Shares of Walmart have reached a year-long high after 13% year-to-date gains. This is particularly impressive when compared to the performance of its competitor Target, which has plunged 13%.
Walmart shares are performing very well because the retailer is perceived to have the ability to get a large share of the market heading into 2024.
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Walmart success story: Why the retailer’s shares and sales are up in 2023
A consumer survey by investment bank Stifel showed that the store has been “retaining higher income shoppers earning more than $100,000 a year,” per Yahoo Finance. This group of consumers has been on the hunt for lower prices, with 71% of them shopping at Walmart so far this year, as compared to only 50% at Target and 30% at Costco.
According to GlobalData Managing Director Neil Saunders, Walmart is performing well because the cost-of-living crisis has pushed consumers to discount and giant retailers.
Retail Dive says that higher-income shoppers have been depending more and more on Walmart for groceries and other household items. The retailer is also gaining market share among younger shoppers.
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Walmart looking to be advertising star
Some experts at Wall Street believe that the upward movement of Walmart shares is not totally attributable to shoppers looking for lower prices. Guggenheim analyst Robert Drbul says that the company has also successfully diversified its income streams.
For one, they have been exploiting their wide reach by venturing into in-store advertising.
Walmart is planning to make more use of in-store ads via the corporation’s 170,000 digital screens across its stores. They also intend to promote 30-second radio spots that will be available to their existing partners later this year which can target a particular store or region.
Aside from the added revenue, Walmart is also selling ad space to expand into higher-margin businesses. The retailer has almost 4,700 stores spread throughout the country, with approximately 90% of Americans living within 10 miles of a Walmart store. The corporation aims to eventually to break into the top 10 advertisers in the United States.
The retailer also looks to be venturing into healthcare, as evidenced by its recent end of partnership with National Vision.