Walmart CFO tells Fox Business why it’s continually gaining more higher-income shoppers.
The Walmart of today is a far cry from what customers have seen historically, according to Walmart CFO John David Rainey. It’s not an accident, either.
Rainey, who joined the company in 2022 after holding significant positions at PayPal and United Airlines, told FOX Business that the nation’s largest retailer has been “upleveling” its brand and enhancing the looks of stores, which are key factors behind its appeal to higher-income shoppers.
“Today’s Walmart is very different than the Walmart of several years ago,” Rainey said, adding that it has been making changes that “appeal to a much broader demographic than what we have historically.”
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Over the past few years, Walmart has consistently reported an increase in higher-income households. In its latest fiscal quarter, the company announced it had continued to “gain market share in the U.S., both in grocery and general merchandise,” with households earning more than $100,000 accounting for 75% of its share gains.
Walmart’s modernized apparel section (Walmart)
The company reported that its third-quarter revenue climbed more than 5% from the prior quarter to $169.6 billion, beating Wall Street’s estimate of $167.72 billion. Adjusted earnings per share also beat Wall Street estimates by 5 cents. The company’s success has impressed Wall Street, with shares of the company rising over 60% year to date.
Rainey credits part of the company’s success in attracting a wider range of shoppers, including more affluent customers, on expanding its product assortment, particularly in its e-commerce business. The addition of higher-end items, like Apple products or Bose headphones, which “are sought after by more affluent customers,” are some examples of this strategy, he noted.
Rainey acknowledged that the company isn’t able to carry all the brands that will “appeal to a broad representation of consumers in our stores.” That’s where he said they are leading on its online marketplace. The company reported that it had over 700 million items across its marketplace.
But even with this expansion of its traditional assortment, Rainey reiterated that the company “isn’t alienating our more traditional customer cohorts.”
Walmart’s modernized grocery department (Walmart)
One of its main focuses has been on expanding its assortment, bringing in more brands that appeal to “everyone.” But as the company added more products, including higher-end items, other suppliers took notice and wanted to join in.
“If you’re a supplier or a vendor, you actually want to sell your product where the people are, where the eyeballs are coming. And so that’s really helping us right now,” he said.
Aside from improving its assortment, Rainey said the company has boosted the investment in its store experience.
The company has been building new modernized stores and remodeling hundreds of others.
Over the past three years, it remodeled about 700 stores each year on average. During the upcoming fiscal year, Rainey said they’ll remodel slightly more.
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“When you walk into one of these remodeled stores, it’s a very, very different experience from what you’ve thought about historically,” Rainey said.
The newly constructed and remodeled stores boast the company’s new store concept with improved layouts, bigger product selection and new technology that will help associates with customer support. The stores have refreshed signs, paint, shopping carts and a new checkout design.
There are also interactive displays in certain areas of the stores and massive merchandise on display, so customers can get a better look at products.
In the U.S., the company operates just over 4,600 stores and employs about 1.6 million associates. That does not include the 599 Sam’s Club membership warehouses it also operates in the U.S.
