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Walmart shares reach record high as retailer’s focus on value attracts shoppers, investors

Customers shop at a Walmart store on May 18, 2023 in Chicago, Illinois.

Scott Olson | Getty Images

Actions of Walmart hit an all-time high Friday, as investors bet the discounter will outperform its retail rivals and attract shoppers throughout the holiday season because of its reputation for value.

Shares of the big-box retailer hit a high of $166.30 earlier today. This is the highest level since Walmart began trading on the New York Stock Exchange in August 1972.

Walmart, known for its giant stores and low prices, has reported strong results over the past year even as U.S. consumers have forgone discretionary purchases like new outfits, flat-screen TVs and more . It’s the nation’s largest grocer and makes more than half its annual revenue from groceries — a category shoppers need, even when inflation or a recession strains their budgets.

This activity has helped Walmart attract foot traffic, even as other retailers like Macy’s And Target give a cautious outlook and see weaker results.

For Walmart, persistent inflation – particularly in categories like food and household essentials – has also become an opportunity to entice new or less frequent shoppers to its website and stores. In calls with CNBC in recent quarters, Chief Financial Officer John David Rainey said the company has attracted more grocery shoppers. from households earning over $100,000.

When these shoppers visit its stores and website, they see that Walmart has tried to improve the customer experience to keep pace with its fancier, more tech-savvy competitors, like Target and Amazon. The company has launched and developed fashion-forward clothing brands. He has gave its website and app a makeover. It’s investing more than $9 billion over the next two years modernize its stores across the country and give them a modern look. And it added more high-end items and brands to its website. via its third-party marketplace.

Walmart also challenged another dynamic in the retail industry. As gains from the Covid pandemic fade and most businesses report declines in online sales, this has achieve double-digit gains in e-commerce for its activities in the United States during the last two quarters.

In an interview with CNBC in August, Rainey said Walmart can attract customers with its prices, but wants to beat competitors and retain those shoppers by making shopping easy and convenient. Curbside pickup and delivery has driven the company’s e-commerce growth, he said.

“It really shows that Walmart’s value proposition is more than just low prices or low value. It’s convenience today,” Rainey said. “So we’re leaning heavily into that and both aspects of that part of our business.”

As the company outperforms many of its peers, some investors have noticed. Since the start of the year, Walmart shares have soared nearly 16%. That outpaces the S&P 500’s gains of more than 13% and the retail-focused ETF XRT’s gains of about 3% over the same period.

Walmart is scheduled to report its third-quarter financial results on November 16.

—CNBC Christopher Hayes contributed to this story.

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