Walmart says Ozempic users actually spend more: Analyst

• Walmart’s US CEO recently spoke about the impact weight loss drugs like Ozempic have had on sales.
• Morgan Stanley’s analyst note aims to clarify Walmart’s statement.
• Walmart told analysts that a small group of customers known to take drugs are spending more overall.

Walmart is trying to figure out how weight-loss drugs like Ozempic and Wigovy are actually impacting its bottom line.

An analyst note published by Morgan Stanley on Tuesday includes new information about market-moving comments made by Walmart U.S. CEO John Furner last week about the impact of GLP-1 weight loss drugs on spending behavior. ing.

“We’re definitely seeing a slight change relative to the total population, and we’re seeing a slight setback across the basket,” Furner said in an interview. bloomberg. “It’s just fewer units and slightly fewer calories.”

The comments resulted in dozens of news articles. Shares of Walmart and other snack makers fell on the news.

However, after speaking with Morgan Stanley analysts, Walmart revealed “two potential misconceptions,” the analysts wrote.

Analysts say the group of customers taking the drug that Walmart can track is small. However, within this group, Walmart observed a slight year-over-year decline in spending by these customers on food.

But “even excluding drug costs, overall spending is higher,” the analysts wrote, based on conversations with Walmart. Spending is increasing from categories such as lifestyle, fitness, and “medications to reduce side effects of medications.” These weight loss drugs have known side effects such as nausea and diarrhea.

Overall, the authors write, changes in GLP-1 spending do not significantly change Walmart’s overall business. Walmart did not immediately respond to Insider’s request for comment ahead of publication.

Of course, this doesn’t mean the drug won’t be a headwind for Walmart and other retailers in the long run. But the report may have missed “the broader point that customer engagement with Walmart appears to increase after taking GLP-1 drugs,” the analysts wrote.

Meanwhile, Walmart’s U.S. CEO isn’t the only executive discussing Ozempic and fueling a frenzy about the effects these drugs could have on companies that sell food to consumers. The drug has also been mentioned by the CEO of Kellanova, makers of Cheez-It, Pringles and Rice Krispies Treats, and the CEO of Smucker’s. Both executives said they were monitoring the research.

And just as AI has become a buzzword on tech earnings calls this year, AlphaSense data shows that mentions of Ozempic in consumer products earnings calls, corporate documents, and related news are on the rise. Increased by 228% in the last 90 days. Insider previously reported that mentions of “GLP-1” increased by 99%.