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Long after the spring spike of pandemic-related pantry loading and panic buying, Walmart Inc is still benefiting from all the ways Covid-19 has reshaped consumer needs and spending patterns. And yet, even as the mega-retailer unveiled another strong quarterly performance, the underpinnings of its results should serve as a wake-up call to Washington: More government stimulus is urgently needed because it was crucial to keeping consumers off the sidelines this summer.
Walmart reported that US comparable sales rose 9.3% from a year earlier in the period ended on July 31, far surpassing analysts’ estimates.
The growth was powered by its e-commerce division, where sales jumped 97% from a year earlier, with both pickup and delivery options notching all-time high sales volumes. The robust growth also reflected a 27% increase in average ticket, or the total bill, as people consolidated their shopping into fewer trips.
While Walmart continued to see healthy growth in its grocery segment, an important component of its battle with Amazon.com Inc, its strongest sales increases in the US division were in
general merchandise, with shoppers shelling out for sporting goods, gardening gear and electronics. Home Depot Inc also appeared to benefit from consumers sprucing up their houses and yards, reporting a blockbuster 23% increase in comparable sales in the quarter. But at Walmart, even clothing — which generally has been one of the bleakest categories in the retail industry — saw increased sales.
In earnings materials, Walmart cited the importance of government stimulus multiple times, saying it buoyed results at both its namesake stores and its Sam’s Club chain.
The company said that consumers having that money in their wallets helped power sales in high-margin general-merchandise categories, meaning it supported both revenue growth and profitability.
The company said “as stimulus funds tapered off, sales started to normalise.†For Walmart, “normalising†still made for quite healthy business; executives said US comparable sales were up 4% in July.
—Bloomberg