Rick Cazenave’s Post

Inferior market conditions. In the news, Walmart is announcing more price discounting. A former Walmart CEO warned a few months ago that the positive company financial data indicates a disturbing negative situation in the broader consumer economy. Walmart is seeing increases in traffic from non-traditional Walmart customers. These are customers that typically have shopped at higher end retail and grocery chains that are increasingly moving some of their purchases to Walmart and other discount retailers. Combined with the challenges of multiple companies at the lowest end of retailing (e.g. dollar stores), the data clearly shows a decrease in spending behavior both measured in dollars an units. For B2B manufacturers, the first concern is unit demand. Pricing can be used to offset the revenue line, but ultimately operational footprint was linked to an expected unit demand. As unit demand drops, the risk of hidden unit sale margins to un assigned operational variances increases. (i.e. your unit standard costs are no longer accurate at lower utilization rates). You can only affect demand so much. All manufacturers should be looking strongly at their order-to-deliver strategy in the context of operational variance optimization. In some cases, this may require foregoing even more sales opportunities that you find are net negative to the P&L. #b2b #manufacturing #b2bmanufacturing #inferiormarket #recession #outlook #forecast https://lnkd.in/dqQcqxu3 https://lnkd.in/dAC2hyww

In Q3, 46 cents of every dollar of US retail growth went to one of three companies: Amazon , Walmart, and Costco Wholesale. Wow! And they were even more dominant online, accounting for 75% of ecom sales growth. This is one of the takeaways from Morgan Stanley’s “Retail Funnel” report by Simeon Guttman and Brian Nowak, and gets my vote for the biggest retail news of the past week. And it means “the rest of retail [is] losing share of incremental sales on average … with the big getting bigger at an accelerating pace.” With overall industry growth of 2-5% (delending on whether you exclude inflation), this means that every other retailer is fighting for share of a shrinking spending pie. (As an aside, spending pie is also the punchline to a #lamedadjoke about a retailer’s favorite Thanksgiving dessert.) https://lnkd.in/erqa9McA

This week's retail roundup highlights key developments across major players in retail. Walmart continues to appeal to both high-and low-income shoppers, but faces challenges such as potential tariff impacts and increased competition due to popular weight-loss drugs like Ozempic. Target is grappling with pricing sensitivity and demand issues, citing the U.S. port strike, but possibly overlooking deeper challenges. Meanwhile, Costco is offering an attractive deal on its Gold Star membership, adding to its value proposition. Click the link below to view the full slideshow and explore the latest retail news in detail. #RetailRoundup #WalmartNews #TargetUpdate #CostcoDeals #RetailTrends #BlackFriday2024 #RetailInnovation #EcommerceInsights #ShoppingNews

No surprise that Walmart continues to post huge numbers! However, I would look beyond the headlines of these articles for the takeaways in the context of the overall industry. Yes, we are seeing Walmart post strong numbers but that doesn't necessarily mean consumer spending is strong. A rise in Walmart is also an indication of trading down from more premium retailers. When we see budgets tightening we also see consumers start to prioritize and be strategic about where they trade down (on a retailer level or also on a product/category level with private label usage). We are approaching a very critical pre-holiday season that continues to start earlier every year. I am highly interested how current economic trends are going to impact spending not only on a product level but on a retailer level as well. No surprise in the continued rise in the RMN numbers for Walmart. I believe we will only continue to see an expansion of channels/ad products and an integration of retail media trading variables into overall retail JBPs for brands. With consumers tightening budgets and not spreading themselves too thin, perhaps it's time for brand's to take a similar approach, to prioritize a few critical retailers to their business and focus on what matters most (to me this is more flexibility with partners to drive mutually accountable BrandFormance type opportunities). https://lnkd.in/eb9368Mm https://lnkd.in/eCm8puST

Walmart is thriving ahead of the holiday season, reporting significant growth in its latest earnings. Consolidated revenue increased by 5.5% year-over-year to $169.6 billion, with U.S. sales up 5% to $114.9 billion. U.S. comparable sales rose 5.3%, while e-commerce sales grew 22% domestically and 27% globally. Walmart also saw its marketplace expand by 42% in Q3, demonstrating its successful focus on e-commerce. CEO Doug McMillon attributed these results to efforts in lowering prices, growing newer businesses, and appealing to diverse markets, including upper-income households, which accounted for 75% of the company's recent growth. In contrast, other discount retailers like Family Dollar, Walgreens, and Big Lots have been struggling, with closures of 677, 259, and 360 stores, respectively. Experts cite several factors for these struggles: - The end of a COVID-era "retail sugar high" that temporarily boosted sales. - Fierce competition from giants like Walmart and Amazon, which leverage economies of scale to offer lower prices. - Macroeconomic pressures like inflation and high interest rates, which have made consumers more price-sensitive. Walmart’s ability to attract higher-income shoppers and expand its e-commerce capabilities has intensified challenges for smaller discount retailers. These businesses are finding it increasingly difficult to compete in a market dominated by larger, more resourceful players. #RetailTrends #WalmartSuccess #EcommerceGrowth #RetailIndustry #DiscountRetailers #MarketCompetition #EconomicImpact

Walmart is famous for selling just about anything you can think of, but shoppers rely on the retail giant more for groceries than for any other category sold in the company's 4,600 US stores. What's more, more shoppers are getting their groceries from Walmart than from any other retailer, and it's not even close. Nearly one in four grocery dollars in the US is spent at Walmart, more than double the share that shoppers spend at Kroger or Costco, according to consumer analytics firm Numerator. That all adds up to more than $264 billion spent on groceries at Walmart US locations in 2023, up from $247 billion and $219 billion in the preceding two years. Read more on how Walmart became America's grocery king on Business Insider. 👇 #walmart #grocerystore #retail

Walmart reported Revenue rose 4.8% to $169.34 billion, topping estimates of $168.63 billion. Transactions rose 3.6% and the average ticket was up 0.6% versus last year. Walmart said sales were fueled by strong demand for fresh food, particularly produce and high-quality meats. Spending was also up on personal care and beauty products. #retailrealestate #commercialrealestate #walmart #softlanding

Weaker Demand For Big Ticket Items Holds Back Growth At Costco Costco Wholesale has missed market expectations for fourth-quarter revenue growth after being impacted by cautious consumer spending on pricier, big-ticket items in its warehouse outlets. The global membership-only retailer has seen good demand for its low-priced groceries and kitchen staples. However, weak consumer confidence and squeezed budgets after a prolonged period of inflation has hit sales of products such as furniture and electricals. “There’s definitely some signs that the consumer is being very choiceful in how they’re spending their dollars,” said Chief Financial Officer Gary Millerchip, noting that shoppers were looking for more deals and promotions. Over the 16-week period to 1 September, Costco’s total global sales increased 1.0% to $78.2bn, impacted by lower petrol prices. On a comparable basis (excl. fuel and currency exchange), group sales were up 6.9%, held back by 6.3% growth in its 614 US outlets. There was better performance in Costco’s international markets, with its 108 outlets in Canada seeing sales rise by 7.9%. Meanwhile, its 169 warehouses across Europe and Asia (including 29 in the UK) saw sales increase by 9.3%. While Costco has worked on drawing more sales through its website, e-commerce sales growth slowed to 19.5% from 20.7% in the previous quarter. The group’s net profit rose from $2.16bn to $2.35bn after gross margins grew by 40 basis points. Costco’s share price fell 1% after the release of the result, having gained about 37% so far this year. NamNews Implications: * How come anyone is surprised at the fall in demand for big-ticket items… * …by cash-strapped consumers worried about their future? * i.e. Making do with that 'slightly iffy washing machine' for another year? * What is more concerning is that savvy consumers shopping in the best big-ticket outlet… * …are still holding back. #CostOfLiving #BigTicket #FlatDemand

Walmart eyes wealthier shoppers Walmart has been trying to attract wealthier customers for some time but has yet to be successful. However, the retailer is not giving up and is now renovating or building more than 800 stores in the US to feature more attractive displays and higher-end products such as blazers and duck breast. According to an executive, the early signs are promising - sales at the renewed locations are rising faster than at other #Walmart stores. With high inflation, higher-income shoppers are increasingly turning to Walmart. The challenge now is to keep them coming back. Surprisingly, the biggest group of Walmart customers are households making $50,000 to $75,000 a year, accounting for approximately 18% of visits. #retail #AI #tech

Walmart reigns supreme in the US grocery market, with nearly 25% of all grocery dollars spent at the retail giant. This is more than double the share of other popular grocery stores like Kroger or Costco. Check out the latest insights on Walmart's grocery sales and market dominance. #Walmart #GrocerySales #USMarket #RetailGiant