At a time when US consumers are buckling under the weight of record credit card debt and personal savings have plunged to all-time lows, the trade-down phenomenon has erupted, driving both wealthy and low-income households on a hunt for the best deals across big-box retailers.
In July, Goldman analysts led by Leah Jordan pointed out that Walmart had the best grocery deals if that was compared with Sprouts Farmers Market, Whole Foods, and Dollar General. The analyst reconfirmed last month that Walmart continued to lead retailers in offering consumers the most competitive grocery prices.
Then on Tuesday, Walmart reported reported earnings that beat across the board for the third quarter, but also raised its guidance for the third time in a row. There was also signs that wealthier customers traded down to the big box retailer, driving ticket sizes higher. That growth was driven by upper-income households making $100,000 a year or more.
