Walmart says it’s vacation ready, but hasn’t seen a huge wave of shoppers

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Jonathan Mary repairs the 30 days left until Christmas sign at a Walmart store in Miami, Florida.

Joe Raedle / Getty Images

For Walmart, postponing holiday promotions could be strategic. Walmart increased its business for groceries, its core business, in the third quarter. Grocery sales increased nearly 10% year-on-year over the three-month period, in part thanks to low to mid single-digit inflation. Food sales rose $ 3.6 billion in the third quarter – the strongest quarterly growth in six quarters, the company said.

The big box retailer is also trying to strike a balance by passing some higher costs on to customers, while absorbing others to ensure it cuts prices from competitors and maintains its reputation for value, the CEO said. Doug McMillon in an interview on CNBC’s “Squawk” on the streets “with Jim Cramer.

A strategic decision?

Michael Baker, retail analyst for DA Davidson, said Walmart could offset its aggressive grocery prices by postponing its biggest holiday promotions on TVs and more until later in the season.

“It could be part of the strategy not to have that level of promotion sooner,” he said.

Holiday sales are expected to rise 8.5% to 10.5%, for a total of $ 843.4 billion to $ 859 billion in sales, an all-time high, according to the National Retail Federation. The trade group said rising household incomes, high savings ratings and pent-up demand to celebrate would support that prospect.

The pandemic has changed the rhythm of the season. Major retailers closed on Thanksgiving Day last year and pushed back the start of their biggest holiday sales near Halloween in an attempt to reduce crowds. They also promoted new ways to shop, such as curbside pickup.

This year, some retailers have continued those traditions with stores closed for Thanksgiving and early sales for another reason: to stagger demand as congested ports and a shortage of truck drivers mean thinner inventory in some areas. .

Walmart’s decision to halt holiday promotions until November did not hurt its third quarter profits. The company exceeded analysts’ expectations and raised its forecast for the remainder of the year.

When more vacation shoppers come to its stores and website, Walmart will be ready, Biggs said. Its inventory is up 11.5% before the season. He ordered goods early, chartered dedicated ships for Walmart goods and directed them to less congested ports, he said on a call for results.

Stay in stock

Walmart US CEO John Furner said customers will see the difference when they shop. Last year, he said, the company relied on merchandise such as snacks and drinks to fill empty shelves.

“We see customers celebrating,” he said on a phone call, referring to both Halloween and Thanksgiving. “I’ve been to stores across the country and our mix of features is a lot better than a year ago. We definitely have a vacation feeling.”

He said Walmart has an advantage because about two-thirds of its merchandise comes from the United States, allowing it to skip blocked ports altogether.

DA Davidson’s Baker said holiday sales are still in their infancy. He said he expects big box retailers like Walmart and Target to outperform other retailers, because consumers will feel more confident that they can find what they want – or at least a good substitution. Plus, he said, these retailers have a large store footprint that allows shoppers to grab the item they want rather than waiting and wondering when a package might arrive – or if something might sell. .

“Customers are going to understand that larger retailers have a better chance of having the products they want in stock and dealing with supply chain issues,” he said. “People don’t have to be in the financial world now to understand what’s going on with the supply chain. It’s on the news every night. So people understand it. People know a lot of places are going to be out of stock. “

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