- Investors bet on the company to have a strong holiday season, sending Walmart shares to record highs.
- Big retailers have relied on their grocery businesses and their reputation for low prices to attract shoppers, including high-income households, during periods of inflation.
- We’re also investing in store upgrades, expanding our third-party marketplace, and redesigning our website.
A customer shops at a Walmart store on May 18, 2023 in Chicago, Illinois.
Scott Olson | Getty Images
On Friday, Walmart stock hit an all-time high. Investors had bet that Walmart would outperform rival retailers in value and attract shoppers throughout the holiday season.
Shares of the major retailer hit a high of $166.30 earlier in the day. This is the highest price since Wal-Mart began trading on the New York Stock Exchange in August 1972.
Walmart, known for its huge stores and low prices, has performed well over the past year even as U.S. consumers cut back on discretionary purchases like new clothes and flat-screen TVs. The company is the nation’s largest grocer, generating more than half of its annual revenue from groceries. Grocery is a necessary category for shoppers, even when budgets are stretched by inflation or a recession.
The business is helping Wal-Mart gain foot traffic even as other retailers such as Macy’s and Target have issued cautious forecasts and seen weak business results.
For Walmart, the severity of inflation, especially in categories like food and household goods, also presents an opportunity to attract new and less frequent shoppers to its website and stores. In a call with CNBC over the past few quarters, Chief Financial Officer John David Rainey said the company has been attracting more grocery shoppers from households with annual incomes of $100,000 or more.
As those shoppers visit its stores and website, it shows how Walmart is reinforcing its customer experience to compete with more sophisticated, tech-savvy rivals like Target and Amazon. The company has launched and expanded a high-fashion clothing brand. The company has revamped its website and app. The company plans to invest more than $9 billion over the next two years to upgrade and give its stores across the United States a modern look. And we’ve added more products and luxury brands to our website through third-party marketplaces.
Walmart also challenged other dynamics in the retail industry. The company has seen double-digit e-commerce growth in its U.S. business over the past two quarters, even as the spread of the coronavirus pandemic fades and most companies record declines in online sales.
In an interview with CNBC in August, Rainey said that while Walmart may attract customers with its prices, it wants to beat competitors and retain shoppers by making purchases quick and easy. He said there was. He said curbside pickup and delivery are driving the company’s e-commerce growth.
“This really shows that the value proposition for Walmart is more than just low prices and value. It’s convenience today,” Rainey said. “So we lean heavily into that and actually both sides of this part of our business.”
The company is outperforming many of its peers, which has attracted some investors’ attention. So far this year, Walmart stock is up more than 16%. This outpaces the more than 13% rise in the S&P 500 and the nearly 3% rise in retail ETF XRT over the same period.
Walmart is scheduled to announce its third quarter results on November 16th.
— CNBC Christopher Hayes Contributed to this story.
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