Rise of Wealthy Shoppers at Walmart
Walmart, traditionally known for its budget-friendly prices and straightforward shopping experience, is seeing an unexpected shift in its customer base. A growing number of wealthier shoppers are contributing to the retail giant’s growth. According to Walmart CEO Doug McMillon, households earning over $100,000 accounted for 75% of the company’s market share gains in the fiscal third quarter. This trend has been ongoing for more than two years, with affluent customers shopping both online and in-store.
These higher-income consumers are not only driving sales but also supporting Walmart’s move toward selling more high-margin products, such as apparel and home goods. Their spending habits have fueled Walmart’s e-commerce growth, which has seen double-digit increases for ten straight quarters. Additionally, they are boosting Walmart’s newer revenue streams, like its membership service, Walmart+, and its advertising arm, Walmart Connect. As Walmart prepares to release its latest earnings report, analysts are keen to see if these affluent shoppers are here to stay. However, some investors remain cautious, recalling past instances during the Great Recession when Walmart gained but eventually lost upper-income customers once economic pressures eased.
Digital Services Attracting Affluent Shoppers
Walmart’s growing suite of digital services is playing a key role in attracting and retaining wealthier shoppers. Brad Thomas, a retail analyst at KeyBanc Capital Markets, noted that Walmart’s e-commerce options are breaking down traditional barriers for affluent shoppers who may have previously preferred other retailers. Walmart’s membership program, Walmart+, offers perks like free home delivery, making it an appealing alternative to Amazon Prime. Although Walmart hasn’t disclosed exact membership numbers, it has consistently reported double-digit growth in membership income over the past year.
Walmart’s enhanced digital experience, including curbside pickup, home delivery, and expanded online inventory, is helping it compete more effectively. The company has also partnered with resale platform Rebag, offering premium items like Chanel and Louis Vuitton handbags on its marketplace. This strategic move caters to higher-income shoppers while preserving Walmart’s low-price reputation. In addition, Walmart is investing in store renovations to create a more inviting shopping environment, featuring modern lighting, wider aisles, and displays showcasing both budget-friendly and premium brands.
Grocery Gains and Changing Perceptions
Walmart’s grocery department continues to be a powerful draw, even for wealthier shoppers. The convenience of curbside pickup and quick home deliveries through Walmart+ is attracting busy households looking for efficiency. This shift in shopping habits is illustrated by Francesca Frink, a high-income shopper from Illinois, who switched to Walmart for groceries after experiencing the convenience of Walmart+ deliveries. Despite initial reservations, she found Walmart’s product range to include organic and specialty items, leading her family to abandon their previous grocery store.
Walmart’s push to modernize its stores is aimed at appealing to wealthier shoppers while retaining its core budget-conscious customers. The retailer is renovating around 650 locations annually, creating a more premium feel without sacrificing its value-oriented image. The strategic blend of in-store and digital shopping options is helping Walmart maintain its competitive edge, even as it battles rivals like Amazon and Target for wealthier consumers. As Walmart’s customer base continues to evolve, its focus on convenience, digital growth, and store enhancements could prove crucial in sustaining its market share gains.
