Walmart says it’s ready for holidays — but hasn’t yet seen huge wave of early shoppers

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  • Walmart Chief Financial Officer Brett Biggs said the company hasn’t seen a big wave of early holiday shoppers.
  • Unlike its two major competitors, Amazon and Target, Walmart didn’t close its holiday deals in October. Instead, its Black Friday sales will span the entire November.
  • Michael Baker, a retail analyst at DA Davidson, said Walmart is still well positioned for the season as there are more likely items or good options available to customers.

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Retailers are betting on fears that out of stock and shipping delays will prompt people to visit malls, stores and websites and look for gifts this holiday season.

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According to Walmart Chief Financial Officer Brett Biggs, however, the wave of seasonal shoppers at Walmart hasn’t arrived yet. He told CNBC that the company has seen some holiday shoppers, but not enough to drive significant demand in the third quarter.

Unlike its two major competitors, Amazon and Target, Walmart didn’t close its holiday deals in October. Instead, its Black Friday sales will span the entire November. Target begins its holiday push with a “Deals Days” event online and in stores from October 10 to 12. Amazon tried to attract shoppers early by throwing a three-week beauty program that began in early October.

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For Walmart, delaying holiday promotions could be a strategic one. Walmart posted more business for its core business, grocery, in the third quarter. Grocery sales increased nearly 10% year over year in the three-month period, thanks to low to mid single-digit inflation. The company said food sales grew $3.6 billion in the third quarter — the strongest quarterly growth in six quarters.

CEO Doug McMillan in an interview on CNBC’s “Squawk” said the big-box retailer is also trying to strike a balance by passing some of the higher costs on to customers, while making sure it undercuts competitors’ prices. and maintains its reputation for value. On the Road” with Jim Cramer.

A strategic decision?

Michael Baker, a retail analyst at DA Davidson, said Walmart could offset its aggressive grocery prices later in the season by postponing its biggest holiday promotions on TV.

“It may be part of a strategy to not have that level of publicity before,” he said.

According to the National Retail Federation, holiday sales are expected to grow between 8.5% and 10.5%, totaling between $843.4 billion and $859 billion in sales — an all-time record. The trade group said rising household incomes, higher savings ratings and an increase in celebratory demand would support that outlook.

The pandemic has shaken the pace of the season. Last year, major retailers kept their doors closed on Thanksgiving Day and launched their biggest holiday sale near Halloween to try to ease the crowds. He also promoted new ways to shop, such as curbside pickup.

This year, some retailers have continued those traditions with stores closing on Thanksgiving and early sales — spurring demand as congested ports and a lack of truckers mean thin inventory in some areas.

Walmart’s decision to hold off holiday promotions until November didn’t affect its third-quarter earnings. The company topped analysts’ expectations and raised its forecast for the rest of the year.

Biggs said Walmart will be ready when more holiday shoppers visit its stores and website. Its inventory is up 11.5% from before the season. It ordered consignment to Walmart goods, chartered dedicated vessels and directed to less congested ports, he said on an earnings call.

stay in stock

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

“We see customers who are celebrating,” he said on an earnings call, referring to both Halloween and Thanksgiving. “I’ve been to stores across the country and our feature mix looks a lot better than it did a year ago. We definitely get a holiday feel.”

He said Walmart has an advantage because about two-thirds of its merchandise comes from the US, so it can skip ports closed entirely.

DA Davidson Baker said holiday sales are still in the early innings. He said he expects big-time retailers like Walmart and Target to outperform other retailers because consumers will have more confidence that they can find what they want — or at least a good replacement. In addition, he said, those retailers have a larger footprint of stores that allows shoppers to grab that desired item, rather than having to wait and wonder when a package might arrive — or if something sells out. could.

“Customers are going to understand that large retailers have a better chance of keeping products in stock and navigating supply chain issues,” he said. “People don’t have to be in the finance world anymore to understand what’s going on with the supply chain. It’s on the news every night. So people get it. People know that stocks in a lot of places Will end. “

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