Jonathan Mary sets up a sign stating that there are 30 days left until Christmas at a Walmart store in Miami, Florida.
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For Walmart, delaying holiday promotions can be strategic. Walmart expanded its core grocery business in the third quarter. In a three-month period, grocery sales rose nearly 10% year-on-year, driven in part by low to moderate inflation. In the third quarter, food sales rose $ 3.6 billion, the highest quarterly growth in six quarters, the company said.
The large retailer is also trying to find a balance by shifting some higher costs onto customers and absorbing others to lower competitors’ prices and maintain its valuable reputation, CEO Doug McMillon said in an interview with CNBC Squawk. on the street ”with Jim Kramer.
A strategic decision?
Michael Baker, retail analyst at DA Davidson, said Walmart could offset its aggressive grocery prices by postponing its biggest holiday promotions on TVs and other events to a later date.
“It could have been part of a strategy so that there wasn’t this level of advancement before,” he said.
Holiday sales they are expected to grow 8.5-10.5%, with total sales ranging from $ 843.4 billion to $ 859 billion, a record high, according to the National Retail Federation. The trade group said rising household incomes, high savings ratings and pent-up demand for the celebration would support that outlook.
The pandemic has changed the rhythm of the season. Last year, major retailers kept their doors closed on Thanksgiving and pushed back their biggest holiday sales almost to Halloween to try to stifle the crowd. They also promoted new ways to shop, such as pickup.
This year, some retailers have continued that tradition by shutting down stores for Thanksgiving and prematurely selling off for another reason – to curb demand as congested ports and a shortage of truck drivers are pushing inventories down in some areas.
Walmart’s decision to postpone holiday promotions until November did not affect its third-quarter earnings. The company beat analysts’ expectations and raised its forecast for the rest of the year.
When more holiday shoppers arrive at his stores and website, Biggs said Walmart will be ready for it. Its stocks before the season increased by 11.5%. He pre-ordered the goods, chartered specialized ships for Walmart merchandise and sent them to less congested ports, he said in the income statement.
Remains in stock
Walmart US CEO John Furner said shoppers will see the difference when they shop. Last year, he said, the company relied on commodities such as snacks and drinks to fill empty shelves.
“We see customers celebrating,” he said during a phone call, referring to both Halloween and Thanksgiving. “I’ve been in stores all over the country and our feature set looks a lot better than it did a year ago. We definitely have a holiday feeling. ”
He said Walmart has an edge because about two-thirds of its goods come from the US, so it could skip clogged ports entirely.
DA Davidson’s Baker said the holiday sales are still at the start of an opportunity. He said he expects large retailers like Walmart and Target a higher price than other retailers because consumers will feel more confident that they can find what they need, or at least a good replacement. Plus, he said, these retailers have many stores that allow shoppers to pick up the product they want instead of waiting and wondering when a package will arrive or if something might be sold out.
“Customers will realize that large retailers are more likely to have the products they want in stock and solve supply chain problems,” he said. “People don’t have to be in the financial world to understand what’s going on in the supply chain. It’s on the news every night. So people understand that. People know that there will be no supplies in many places. “