Wal-Mart Sees Some Encouraging Signs In Sales Mix

I’m a big fan of Wal-Mart but not as a shopper. I think that the enormous data they mine from their network on a real time basis provides the best insight to the American consumer available. So, when they come out with information I take note.

Here is their latest announcement:

Wal-Mart Stores Inc’s  U.S. customers are spending more on discretionary items as payroll taxes come down and gasoline prices fall, the head of the discounter’s U.S. supercenters said on Wednesday.

The world’s largest retailer is seeing customers treat themselves to items such as sporting goods and bedding, using the money they have now that those costs have come down, Walmart U.S. CEO Eduardo Castro-Wright said.

Walmart U.S. also had a strong Easter, an important season for the U.S. chain, Castro-Wright said at a Barclays conference.

That’s a pretty significant change from late last year and early this year. As the company points out some of it may be due to lower withholding taxes but there is certainly a component of increasing consumer confidence.

Also worthy of note is the fact that the chain continues to attract shoppers who previously shunned their stores. They first noticed an upturn in customers as the recession deepened and new customers turned to them for low prices on necessities like diapers and food. The trend is continuing but it’s not limited to basics.

Still, food is not the fastest growing category at Walmart stores in the United States.

“Our best performing categories right now are things like sporting goods, bedding, towels,” Castro-Wright said.

In February, 17 percent of traffic growth at Walmart came from new households and the majority of those households have annual income of more than $50,000, Castro-Wright said.

Those new customers are spending more than the average Walmart shopper, who typically has a lower annual income.

“The average ticket for those customers is 40 percent higher than the rest of the chain,” he said.

The firm still sees evidence of consumers driven by the paycheck cycle. Buying large value packages at the beginning of the month and then smaller quantities towards the end of the month.

If you’re looking for data points keep an eye on Wal-Mart’s press releases. It might be a good idea to keep an eye on their stock as well. They could emerge from this with some pretty solid additions to their customer base. Once you get over the need to go there in disguise, it’s not a bad place to shop, or so they tell me. 

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