Walmart’s grocery business is winning over more affluent shoppers

  • Walmart’s online grocery orders have been a major driver in its e-commerce business.
  • The company acquired in 2016 to expand its reach to younger, urban and more affluent customers.
  • Proprietary brands acquired and launched in-house have also drawn new shoppers to Walmart.

Walmart is reeling in higher-income customers — including some who are new to the retailer — with its online grocery business, company executives told investors Tuesday at an event in New York.

As its online grocery business grows, the company is seeing pricier items like choice cuts of meat and organic fruits and vegetables in customers’ virtual baskets, said John Furner, president and chief executive officer of Walmart U.S. He said the convenience of the service “aligns well with someone who is time-starved and has higher income levels.”

The Bentonville, Arkansas-based retail giant has an expansive footprint across the U.S., but has tended to have stronger loyalty among shoppers in suburbs, small towns and rural areas. It bought for $3.3 billion in 2016, with the hopes of winning over the e-commerce company’s customers that tended to be younger, more affluent and urban. has been wound down, but the company has bought other brands to expand its customer base — such as menswear company Bonobos.

Walmart offers online grocery pickup at about 3,200 stores and same-day grocery delivery at more than 1,600 stores, as of the fourth quarter. It’s testing a new service called InHome that delivers groceries straight to customers’ refrigerators. It is only available at some stores in Kansas City, Pittsburgh and Vero Beach, Florida.

Furman said Walmart’s range of groceries, including prime beef and organics, has helped draw in different kinds of customers. Once they buy groceries, he said those new or more affluent customers may purchase an item in another department of the store or part of Walmart’s website.

“Those quality levels then enable us to be able to appeal to that consumer across other channels,” he said. 

Walmart is attracting higher-income customers outside of groceries, too.

Marc Lore, president and chief executive officer of Walmart’s U.S. e-commerce business, said first time Walmart customers are buying goods from the retailer’s proprietary fashion and home brands.

Kathryn McLay, president and CEO of Sam’s Club, said the membership-only retail warehouse store pivoted a few years ago to target customers with incomes of about $100,000 and larger families. “That’s driving membership growth, and it’s also driving traffic,” she said.

Ahead of the investor day presentation, Walmart reported disappointing fourth-quarter earnings, which it attributed to lower demand for toys, video games and apparel over the holiday season. Walmart CEO Doug McMillon said he is looking for ways to gain further market share online for its apparel and home goods


7-Eleven tests cashierless store at Texas HQ

7-Eleven announced that it is testing a cashierless store at its corporate headquarters in Irving, Texas. The 700 square-foot store is available to 7-Eleven employees and features various popular products sold in stores, including snacks, groceries, food and beverages.

The company has implemented multiple proprietary algorithms and predictive technology to distinguish customers and their purchases from others in the store, the company said in a press release.

To shop at the store, 7-Eleven employees download an app, sign up, check in at the store, shop and leave. Afterward, shoppers will receive a detailed receipt via the app.

The debut of the cashierless store is the latest tech component 7-Eleven has introduced into its operations. As the company notes in its announcement, the retailer launched its mobile checkout feature and the 7NOW delivery service. The company also announced in September that it was providing franchisees with Microsoft 365 and Power BI to analyze their overall performance.

“Introducing new store technology to 7-Eleven employees first has proven to be a very productive way to test and learn before launching to a wider audience. They are honest and candid with their feedback, which enables us to learn and quickly make adjustments to improve the experience,” Mani Suri, 7-Eleven senior vice president and CIO, said in a statement.

Of course, 7-Eleven isn’t the first to launch a cashierless store, nor is it the only retailer trying to perfect the cashierless retail technology. Amazon has been opening Amazon Go stores in various cities across the country, but consumers have been shopping less at Amazon Go than traditional competitors, a report from Earnest Research found.

As 7-Eleven and Amazon Go test the waters of cashierless commerce, retail startups are developing their own tech. Last July, autonomous checkout startup Standard Cognition raised $35 million in Series B funding. Trigo raised $22 million in September to scale its checkout-free technology to bigger stores. Plus, cashierless checkout tech provider Zippin raised $12 million in Series A funding in December to set up in more stores.