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Walmart Earnings Preview: Groceries, Digital and Omnichannel Take Center Stage 


Walmart earnings, slated for Thursday morning (Nov. 16) before the market opens, will likely offer the latest variations on several themes:

  • Consumers seeking value, especially with consumables and groceries;
  • a shift to digital channels to get at least part of the shopping done, where the online marketplace model is gaining steam;
  • and a combination of omnichannel choices powering how, when and where individuals get what they need, from searching online and picking up in store, to delivery and curbside pickup.

The second quarter (the company operates on a fiscal year) data noted that weekly active digital users grew by more than 20% and that marketplace customer counts were up by 14%. 

In addition, eCommerce sales surged by 24% in the U.S. 

Digital Initiatives and Growth in Private Label Sales 

At the end of last month, in further evidence of digital inroads, the company remodeled 117 stores that include “activated corners” with interactive displays that allow customers to engage with items, and where there are “digital touchpoints” that have also been strategically placed throughout the store to provide customers with more information on products and services.

As to the sales themselves, Walmart detailed on its last call that private label sales tied to grocery items were up 9% year on year. CEO Doug McMillon said on the conference call with analysts that consumers are more budget conscious and noted too that “our curbside pickup business continues to grow as people look for ways to save time and store fulfilled. Delivery is now growing faster than pickup across all three segments.” Curbside pickup saw double-digit growth during the most recent period, according to commentary on that call. 

Consumers Stressing Into the Holidays?

Competitor Target’s results and commentary from Wednesday may give some prologue as to what we’ll hear and see when Walmart reports.

As PYMNTS reported, in comments made on the call, “there’s tremendous pressure on the consumers wallet and the impact of very sticky food and beverage inflation, which compared to pre pandemic. Food and beverage prices are up on average 25%,” COO John Mulligan said. “And that certainly pressured consumers as they’re making choices and certainly has forced them to make very tough choices when it comes to discretionary goods.” 

The company’s overall comp sales were down by 4.9%. And details from the company’s earnings materials note that digital comp sales were down 6%.

Same-day services grew more than 8%, led by more than 12% growth in Drive-Up, Target said.  

As Target CEO Brian Cornell said on the conference call, “Overall, consumers are still spending, but pressures like higher interest rates, the resumption of student loan repayments, increased credit card debt, and reduced savings rates have left them with less discretionary income, forcing them to make trade-offs in their family budgets. For example, this year, we’ve seen more and more consumers delaying their spending until the last moment.” Elsewhere, as Chief Growth Officer Christina Hennington said, “inflation on…categories over the last several years, especially in food, household essentials, even pets and baby, is meaningful. And that’s going to take a while to overcome.”

The headwinds are blowing — and we’ll soon see how Walmart has fared.

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