Walmart gains high-income shoppers as elevated prices persist

"We're seeing higher engagement across income cohorts, with upper-income households continuing to account for the majority of the share gains," CFO John David Rainey told analysts on a Thursday earnings call. 

The company defines the income groups roughly as $50,000 and below, $50,000 to $100,000, and $100,000 and above.

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It's been a consistent theme for the Arkansas-based retailer while household budgets remain under pressure. Rainey noted that in back-to-back fiscal quarters the retailer had "share gains among upper-income households."

The comments come as inflation remains above the Federal Reserve's 2% target. In April, inflation climbed 3.4% from the same time last year, down from the 3.5% reading in March. While inflation has fallen considerably from a peak of 9.1%, progress has largely flatlined since the summer.

This view shows the bakery section at a Walmart store in Secaucus, New Jersey, on March 5, 2024. (Gabby Jones / Bloomberg / Getty Images)

During the fourth fiscal quarter of 2024, Rainey said that while they gained share in every income cohort, "notably, one of the biggest contributors in the quarter was in this income demographic from households that make more than $100,000 a year."

Two-thirds of the share gain in general merchandise within the quarter was through that income demographic, he noted. 

However, while its clear that shoppers are trading down for lower prices amid the current economy, Rainey has long argued that the reason they are gaining share among higher-income shoppers is because of Walmart's focus on "convenience." 

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"We are not just a play for value anymore," he said. "And convenience matters to someone irrespective of what your payback is, irrespective of what your income level is. And we expect that to be durable. We don't expect that to change."

A customer looks at bedding at a Walmart store in Secaucus, New Jersey, on March 5, 2024. (Gabby Jones / Bloomberg / Getty Images)

Similarly, CEO Doug McMillon said Thursday that while the company has been known for its lower prices "forever," it's increasingly becoming known for convenience, which he said serves well no matter the economic environment.

During an earnings call with analysts in May 2023, Rainey credited the company's work over the past three to five years to expand its e-commerce capabilities, such as expanding online pickup and delivery.

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"And it doesn't matter what your monthly income is, everybody values convenience the same. And so … that's the big takeaway here," he said during the call.

In August 2022, McMillon told analysts that the company was in the midst of seeing "mid- to higher-income customers come to Walmart looking for value."

He continued by saying the company wasn't losing lower-income households but rather "adding at the upper end, generally speaking."