Americans are concerned about inflation, so they are shopping more at Walmart.
On Thursday, the US retailer upped its annual sales and profit forecasts for the second time this year, as Americans rushed to its stores for low-cost necessities, driving its stock up 8% to a new high, reported Reuters.
The world’s largest retailer by sales is one of the first major US chains to announce quarterly results that shed light on consumer health, especially after the government revealed an unexpected worsening in the labor market, heightening the prospect of a recession.
The retailer’s statements contrasted with those of rivals Amazon and Home Depot, which both cautioned of consumer caution, even among its more middle- and upper-income customers.
Meanwhile, Walmart’s 26% ad growth outpaces that of its retail and commerce competition, Amazon, whose advertising unit climbed 20% year on year to $12.8 billion, falling slightly shy of expectations, reported EMarketer.
With e-commerce sales increasing by 21% globally, the synergy between Walmart’s online shopping platforms and its advertising business is clear.
According to EMarketer, the capacity to collect and exploit customer data across different channels gives Walmart a competitive advantage in customized advertising, resulting in higher returns for ad clients.
Ariel Ben Solomon is the Growth and Strategy manager at Ecomhunt. He is the host of the Ecomhunt Podcast. Can be followed on Twitter at @ArielBenSolomon
