Inflation, gas prices make even Walmart too expensive as foot traffic nosedives

John Hugh DeMastri, DCNF

Many Walmart shoppers who moved to more local budget options like dollar stores or Aldi when gas prices surged have not returned to Walmart, Reuters reported Thursday.

Foot traffic fell an average of 2.7% at U.S. Walmart locations, which include 3,573 Supercenters and 370 discount stores, compared to the same time last year, according to Reuters. Competing discount grocer Aldi saw foot traffic rise 11.5%, while Dollar General saw a 4.1% increase in foot traffic, as their convenient locations made them preferable for consumers looking to save money on gas, Reuters reported.

Walmart CEO Doug McMillion said that Walmart was an “inflation-fighter” and a prime destination for shoppers during a recession, according to Reuters. However, Walmart’s share as the first choice for groceries dropped nearly 2% from 27.4% in June to 25.5% in July, according to Reuters.

McMillon told Reuters that low-income shoppers were buying fewer items despite the fact that they were consolidating trips over higher prices. Dollar General, on the other hand, has widened its product selection to reflect an increase in sales from its core demographic of families making $40,000 or less per year, CNN Business reported.

Burt Flickinger, managing director of the retail consulting firm Strategic Resource Group, told Reuters that Walmart needs to up its advertising spending to entice customers with “high-value ads.” Walmart should focus on local advertisements such as newspaper ads, Flickinger told Reuters.

Walmart has been struggling in recent months with falling profits that led to the layoff of approximately 200 corporate workers last week, The Wall Street Journal reported. Part of this struggle was tied to inventory snafus, with products that were delayed and in high demand during the pandemic no longer seeing customer interest, leading to oversupply, according to the WSJ.

The layoffs were part of a restructuring effort of Walmart’s corporate roles, the WSJ reported, citing people familiar.

Walmart is not alone in the recent decline, with Target also seeing a decline in shoppers, Reuters reported. While Walmart and Target may offer larger selections, dollar stores are often more convenient and closer to consumers, leading consumers to prefer them when gas prices are high, Jason Benowitz, a senior portfolio manager at the Roosevelt Investment Group, told Reuters.

Discount stores saw foot traffic increase 8% year-over-year in the second quarter of 2022, and were up 13.2% compared to the first quarter.

Walmart did not immediately respond to a Daily Caller News Foundation request for comment.

For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

DONATE TO BIZPAC REVIEW

Please help us! If you are fed up with letting radical big tech execs, phony fact-checkers, tyrannical liberals and a lying mainstream media have unprecedented power over your news please consider making a donation to BPR to help us fight them. Now is the time. Truth has never been more critical!

Success! Thank you for donating. Please share BPR content to help combat the lies.

Comment

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.

PLEASE JOIN OUR NEW COMMENT SYSTEM! We love hearing from our readers and invite you to join us for feedback and great conversation. If you've commented with us before, we'll need you to re-input your email address for this. The public will not see it and we do not share it.

Latest Articles