Walmart’s e-goods sales are driven by wealthy households

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Brief description of the dive:

Wealthy households played a significant role in driving Walmart’s online grocery sales growth in the first half of 2024, according to research by Brick Meets Click and Mercatus, even though lower-income households remain the e-shopping retailer’s core customer segment.
The increase is due to Walmart’s higher-income households spending more online and placing orders more often than other customer segments.
Walmart continues to be the largest grocery store competitor in the online grocery market, gaining approx highest percentage of e-commerce grocery spending ever companies noted last month that in the second quarter of 2024, while grocery stores lost online sales.

Diving Insights:

Walmart’s growing popularity among higher-income households comes at the “expense” of supermarkets, hard discount stores and Target, Brick Meets Click, with in each case a decline in online grocery sales among higher-income households.

Walmart’s wealthiest customer segment, generating more than $200,000 in annual revenue, currently accounts for 8% of its average monthly active user base. Companies found that the number of affluent monthly users has grown five times faster than the overall average monthly active users over the past year.

“Affluent households shopping online for groceries at Walmart spend 1.5 times more than the lowest-income households each month, making them a very attractive customer segment to reach and acquire,” said David Bishop, partner at Brick Meets Click. statement.

Brick Meets Click noted that the growth of Walmart’s affluent segment also comes at a time when lower-income households are phasing out online spending across multiple grocery formats and banners.

The report found that lower-income households – those earning less than $50,000 a year – accounted for 41% of Walmart’s average monthly active users compared with 36% for hard discount stores, 30% for supermarkets and 28% for Target . However, while Walmart’s sales to this customer segment fell 6%, supermarkets and Target saw a decline of 20%.

Supermarkets, discount stores and Target also saw a decline in the overall average value of online grocery orders, while the average value of orders placed by affluent households at Walmart increased by more than 40% compared to the same period last year, to $119.

Nearly 17% of Walmart’s monthly active users in the first half of 2024 also purchased groceries online from supermarkets in the same month, a decline of 28 basis points compared to the period in 2023. This decline was “entirely due to fewer cross-shopping among Walmart’s least and wealthiest households, signaling that Walmart may capture a larger share of the wallet in these segments,” BMC says.

The Brick Meets Click and Mercatus report is based on 10,529 survey responses collected between January and June 2023 and 10,501 responses collected between January and June 2024.