Walmart and Goal’s quarterly results lay bare retailers’ differences


Walmart‘s stock surged this week. Goal‘s shares plunged.

The rival big-box players are each known for selling an array of products including food, clothing, home goods and kitchen appliances. Each their CEOs − Walmart’s Doug McMillon and Goal’s Brian Cornell − stepped into their roles in 2014.

However the retailers issued starkly divergent outlooks this week that underscored their differences – most notably in how much each relies on grocery sales.

On Tuesday, Walmart raised its financial outlook for the yr after U.S. same-store sales within the third quarter rose 8.2% from a yr ago when excluding fuel. A day later, Goal slashed its forecast for the vacation quarter after comparable sales rose just 2.7%, with executives noting weakening trends heading into the season.

Here’s a rundown of 4 key aspects that help explain the split in earnings results:

Grocery routine vs. Occasional stop

Walmart gets a far larger share of its sales from groceries than Goal, which helps it draw shoppers seeking to get monetary savings as inflation squeezes budgets.

Groceries account for 56% of Walmart’s annual revenue, compared with about 20% at Goal, in response to company filings. Walmart is the country’s largest grocer by revenue.

Goal also sells groceries, nevertheless it doesn’t have the identical breadth of offerings. For instance, stores sell eggs, milk, vegatables and fruits, but should not have full-service bakeries, meat and seafood counters or delis where shoppers can get freshly sliced turkey and cheese.

More customers turn to Walmart to fill out the majority of their grocery lists, said Neil Saunders, managing director of retail advisory firm GlobalData.

In contrast, shoppers are likely to go to Goal more for “top-up shopping” — grabbing a couple of food items when making a run for another excuse, resembling picking up diapers.

Whilst shoppers resolve not to purchase a TV or latest outfit, they’ve had to maintain replenishing the food of their fridges — an element that’s keeping Walmart’s sales steadier.

A person pushes his shopping cart past bread on the market at a Walmart SuperCenter store in Rosemead, California.

Frederic J. Brown | AFP | Getty Images

Low prices vs. Fun finds

Walmart vs. Goal

  • Groceries as a percentage of sales:
    Walmart: 56%, Goal: 20%
  • U.S. same-store sales within the third quarter vs. yr ago:
    Walmart up 8.2%, Goal: up 2.7%
  • U.S. store count 
    Walmart: Greater than 4,700,  Goal: Greater than 1,900

Source: Company filings

Planned purchases vs. Impulse buys

Goal has turned its stores into mini malls offering a spread of “low cost chic” items.

It has launched exclusive private brands, resembling All in Motion, a classy, but lower-priced activewear brand and Hearth & Hand, a house decor line created with celebrity home renovation duo Chip & Joanna Gaines.

It also has shops for popular national brands, including Disney, Ulta Beauty and Apple. And it has a Starbucks where shoppers can grab a latte to sip on as they browse.

The assortment has led to jokes about “Goal runs,” where shoppers stop by for toothpaste, but find yourself leaving with loads more.

About 21% of sales at Goal come from unplanned purchases, in response to GlobalData research from before the pandemic. At Walmart, the figure is about 12%.

In an inflationary environment, those shopping sprees – and impulse buys – turn into a tougher sell.

“Individuals are beginning to say ‘Do I really need this?'” Saunders of GlobalData said. “When people try this, that affects Goal more so than Walmart.”

Shopper spending power

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