In the holiday rush, value takes center stage for retailers

Consumers are being more particular with their pennies this holiday season. That means that the holiday shopping spike could fall a little flatter this year, except for the retailers offering the most competitive pricing.

As Americans cope with inflated prices on groceries and the financial unknowns that may come with a second Trump term loom, shoppers have remained focused on buying essentials rather than discretionary items. And while retail chains like Target, Kohl’s, Best Buy, and others have seen sales fall off in the third-quarter, as consumers stick to the basics, other retailers have been thriving.

Namely Walmart.

More customers have been turning to the comparatively low-priced retailer for grocery items as inflation has driven grocery prices up and up. Walmart has been able to capitalize on the shoppers spending more on food in stores, too. In April, the chain launched its private-label brand, Bettergoods, a line of plant-based, organic, and gluten-free items, retaining customers who may have gone elsewhere for those kinds of purchases.

Now, while plenty of chains are posting lower-than-expected numbers, Walmart is cruising into the holidays unscathed—even booming. The company’s shares reached an all-time high of $88.29 in morning trading last week. “We’re encouraged by the steady momentum building across the business,” Walmart’s Chief Financial Officer John David Rainey told analysts during last Tuesday’s earnings call.

Rainey also told AP News that winter clothing sales have been lower than usual (likely a result of warmer than normal temperatures), that shoppers are spending more on food than general merchandise, and are exercising caution around pricier purchases.

Shoppers certainly have less money to go around this year. But that doesn’t mean they won’t be shopping for the holidays. In fact, consumers have been spending more money recently. In October, consumer spending increased more than expected.

The Mastercard Economics Institute’s recent 2024 holiday spending outlook report explained that shoppers will continue the 2023 shopping trend of “taking their power back” or getting the absolute best promotions, discounts, and deals. The report said the consumers this year are “value conscious”, mainly because they are feeling even “more stretched” than last year.

When it comes to value, consumers seem set on where to go. Walmart projects its sales will keep escalating. According to FactSet, the brand expects annual sales to be up anywhere from 3.75% to 4.75%. It previously said it expected sales to rise from 3% to 4%.