What to consider when inflation slows down

Inflation is fallConsumers were Hunt for bargains And throw away expensive itemswhich has helped to reduce prices. Although costs remain high, Walmart benefit because their cheaper items attract price-conscious buyers.

The US retail giant will announce its second-quarter results on Thursday morning before the stock market opens. The quarterly results could set the stage for other retailers such as Goal And Lowe’swhich will also announce their results in the coming weeks. Walmart’s performance could shed some light on how consumers deal with inflation and rising costs, and whether Wall Street fears recession are justified.

Walmart’s revenue will follow massive stock gain in Junewhere shares hit an all-time high following an upgrade by analysts at JPMorgan, who said the retailer had a “strong balance of defense and offense” amid weaker consumer spending.

Considering Walmart’s Size and scaleincluding the ability spend a lot of money To Advertising And technologyThe results may not necessarily be representative of retail in general. Still, analysts say the retailer will likely be one of the few to post big gains.

“Consumer trends have deteriorated significantly in recent months. While Walmart was probably not completely immune, it has certainly performed better than others,” UBS analyst Michael Lasser said in a research note. Lasser added that the company has likely performed better than its peers due to its “resilience and strategic investments,” but that its outperformance may fall short of expectations. He also said that Walmart’s Bettergoods own brand inspired by chefs and its back-to-school offerings may have helped it this quarter.

Bank of America analysts said in a research note that while Walmart’s food and wellness categories may continue to lag, Advertising business and improvements such as Shop conversions And faster delivery options are likely to increase profit margins and overall performance.

In a summer full of offersShoppers have made their way to a local Walmart, according to a new Report from pedestrian traffic analytics firm Placer.ai. The company noted that visits to Walmart increased 3.9% in the second quarter compared to the same period last year. The increase is modest compared to the 12.2% increase at Costco Wholesale and the 7.4% increase at BJ’s Wholesale.

Walmart’s increase in customer traffic could be due to its “Walmart Deals” week, the retailer’s first major summer sale, which took place from July 8 to 11. During this time, the leading retailer in the country said there will be discounts on thousands of items, including back-to-school supplies, tech, toys, outdoors, travel and more.

Jerry Sheldon, vice president of technology at market research firm IHL Group, said middle-class consumers are still struggling due to inflation and are turning to low-cost stores like Walmart.

Walmart’s “name is not mentioned in the crowd of discount retailers that are raising their prices or raising them more than inflation,” Sheldon said. “The current economic situation clearly favors Walmart.”