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Walmart Courts Affluence as Wealthier Shoppers Trade Down

Walmart

Walmart is reportedly making a renewed effort to entice wealthier shoppers.

As Bloomberg News reported Thursday, the retail giant is renovating or building more than 800 locations across with things like improved lighting and higher-end products.

Jordan Berke, a former Walmart executive and founder of Tomorrow Retail Consulting, said the company has spent years studying online shopping patterns to glean what high-income shoppers want, and this “helped it reach and get to know customers much better.”

The Bloomberg report notes that the effort is a test of whether Walmart can bring in more affluent customers while not forgetting its long-held, value-focused roots.

Shoppers, the report said, have begun noticing the changes. Among them is Yolanda Jones, an analyst in St. Louis, who told Bloomberg she was recently surprised to find duck breast in her local Walmart — the same brand she’d seen fetching a much higher price at a fancier store.

“I thought I hit the jackpot,” said Jones. “I’m going to keep my eye out.”

As PYMNTS wrote last month, Walmart has been attracting upper-income consumers as it makes gains with shoppers seeking value.

“Seeing the number of customers who shop continues to grow, we’ve seen new customers all year across a wide variety of income groups,” Walmart U.S. President and CEO John Furner told analysts on an earnings call.

Research by PYMNTS Intelligence has found that even as shoppers have felt some of the pressure of inflation ease, they’re still switching to lower-cost stores.

For example, the share of consumers reporting that they had cut back on the quality of the items they purchased fell from 36% in December 2022 to 32.5% in December 2023, while the share cutting down on nonessential spending dropped from 65.1% to 61.6% in the same period.

“Yet over the years, consumers began shifting away from higher-priced retailers to more budget-friendly competitors more often,” PYMNTS wrote. “The share of consumers reporting that they had switched to cheaper merchants for retail products rose from 53.9% in December 2022 to 57.6% in December 2023.”

Another lower-cost retailer, Dollar Tree, said last week it was making gains with higher-income consumers, even in the face of larger challenges to its business.

“The fastest-growing demographic is north of $125,000 a year in income, which brings a lot more firepower to the store,” Dollar Tree Chairman and CEO Rick Dreiling said during an earnings call. “I think that attraction is the multi-price point and the fact that we’ve been able to increase the variety of product in the store.”