Walmart Sees Mid-single-digit Grocery Growth As Shoppers Prioritize Affordability

Walmart’s affordability push is showing up in what shoppers are buying, with transactions and unit volumes rising as the retailer cut prices on everything from ground beef and groceries to fashion and school supplies.

During a Thursday (Aug. 20) discussion of fiscal year 2027 second-quarter trends and metrics, management acknowledged more pressure on household budgets, particularly after higher gasoline prices forced some consumers to make more visible spending choices in June.

“Customers tell us they’re still feeling some pressure,” CEO John Furner said. “But it’s clear customers are looking for value and convenience, and they want things fast.”

The strategy has at least some headwinds to combat, as U.S. same-store sales grew 2.6%, tied in part to drug price declines, which is the slowest pace seen since the end of 2020. The growth missed Wall Street estimates for the first time in several years, and investors sent the shares down by about 8% at the start of trading on Thursday. The data give evidence to the balancing act that exists between consumers looking to stretch their dollars and the company’s efforts to keep traffic flowing in store and online.

The company had more than 11,000 price rollbacks during the quarter, compared with about 7,200 at the end of the first quarter. Those reductions weren’t concentrated in one part of the store. Furner said Walmart spread them across food, consumables, fashion and general merchandise, including seasonal and regularly replenished products.

Furner said transactions increased at Walmart U.S., Sam’s Club and internationally, with positive unit growth as well. Walmart U.S. comparable sales rose 2.6%, led by transactions. Enterprise net sales grew 5% in constant currency, while Walmart U.S. net sales increased 3.5%.

Price reductions can make the sales numbers harder to read because shoppers may buy more units without producing the same increase in dollars. Furner said food rollbacks typically generate a unit response first, followed later by market-share gains.

“Your shoppers don’t necessarily buy more food because they see lower prices,” Furner said during the call. “But over time, what we’re trying to do with rollbacks and low prices is build trust with customers.”

Walmart also provided evidence that affordability is influencing what goes into the basket. Grocery comparable sales rose by a mid-single-digit percentage, supported by strong unit volumes, with particular strength in pantry and fresh food. Consumables benefited from personal care, beauty and pet supplies. Grocery inflation was 1.3%, including a drag from lower egg prices.

The Basket Is Expanding Beyond Food

General merchandise also grew by a low-single-digit percentage, led by toys and fashion. Marketplace sales increased more than 40% in hardlines and home, including furniture.

Walmart is also getting more business from higher-income households, and management attributed some of those gains to assortment rather than price alone. CFO John David Rainey said Walmart is carrying more elevated brands and higher-priced merchandise designed to appeal to a broader customer base. Private-label fashion brands Scoop and Free Assembly posted triple-digit comparable-sales gains, while back-to-college demand was strong for decor including candles, throws, rugs and lamps.

That gives Walmart two distinct ways to build the basket: aggressive pricing on everyday purchases and a wider assortment that can capture discretionary spending.

Digital shopping is helping connect those purchases. Walmart U.S. eCommerce sales grew 24%, store-fulfilled delivery sales increased more than 40%, and the number of average weekly eCommerce customers rose more than 20%. Globally, eCommerce sales increased 23%.

Those digital baskets are broad. Furner said fast-delivery orders include fresh and frozen food, pharmacy, fashion and general merchandise. U.S. fast delivery grew 48%, and 70% of eCommerce orders are now delivered the same day or faster.

Automation is becoming part of the machinery behind the actual transactions. More than 50% of eCommerce fulfillment volume now moves through automated facilities, while 3,100 U.S. stores receive some level of automated freight. Walmart said automation is helping streamline inventory flow as stores handle both traditional shopping and digital fulfillment. Stores now serve as the last-mile fulfillment point for 80% of eCommerce orders and all fast deliveries.

Membership is reinforcing that shopping frequency. Walmart+ membership grew at a double-digit rate in the U.S., while Sam’s Club U.S. membership increased nearly 6%. Rainey said Walmart members spend about four times as much as nonmembers.

For the rest of the year, Walmart expects affordability to keep feeding the top line. It raised its full-year sales growth forecast to 4% to 5%, from 3.5% to 4.5%, and said it expects slightly stronger second-half sales than previously forecast as the price investments attract additional spending.

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