Walmart and Target will announce their quarterly results this week, and Placer.ai has released an analysis that provides some insight into how their stores have performed during the most recent quarter and what their prospects might be for the fiscal year’s final frame.
Placer.ai reported Target year-over-year visits to stores were down 2.1% during October but up 14.5% versus the same month in 2109. Walmart visits during October were down 3.5% versus 2021 but up 1.8% versus 2019.
To gauge overall performance, gains in e-commerce have to factor in, and it’s fair to observe that both retailers have made gains on the digital frontier. For example, Target digital comparable sales gained 9% in the second quarter, following growth of 9.9% in the 2021 period. Walmart reported its digital sales growth was 12% year over year in the second quarter and 18% on a two-year stack basis.
According to Placer.ai, in 2021, Target and Walmart saw strong performances during back-to-school season and, again, in October, as retailers generally launched initiatives to prompt earlier holiday shopping this year.
Last year’s foot traffic peaks set a critical context for understanding visits to Target and Walmart in recent months, Placer.ai reported. Target saw year-over-year declines of 0.9% and 2.1% in August and October, characterized as relatively minimal by the market researcher considering the heights hit during those months in 2021. September, a somewhat weaker month in 2021, saw year-to-year visits increase by 1.9%. So Target kept visits relatively stable and held onto strength gained since the onset of the COVID-19 pandemic, Placer.ai concluded.
Walmart saw a similar pattern as year-over-0year visits slipped just over 3% in August and October, while September visits were essentially in line with 2021 levels. As such, each retailer demonstrated the ability to sustain strength, which indicates they both are able to generate ongoing demand, Placer.ai asserted. This strength becomes even clearer when looking at the same months versus pre-pandemic 2019, the traffic tracker added. In recent months, year-over-three-year visits grew at Target, surpassing 13%, while Walmart saw its foot traffic increase most months as well.
Placer.ai observed that, while the overall metrics look strong, other perspectives further support the premise that Target and Walmart drawing power will boost results in the holiday season. Target enjoyed a 2.9% gain in store visits during the week beginning October 3rd , largely the result of its Deal Days promotion success.
Placer.ai maintained that retail ‘holidays’ have held onto their ability to drive urgency and interest. So while key days such as Black Friday haven’t surpassed former peaks, they could hold significant opportunities this year.
In cases where store visits have been down in some months, the underlying reality could be consumers are simply shifting their patterns as opposed to reducing their shopping. Median visit duration for Target and Walmart have been up in recent months, suggesting the return of mission-driven shopping, a trend where visitors look to accomplish more with fewer visits. A term applied to consumers minimizing store visits to avoid contracting COVID-19 in the pandemic, now the likely reason that consumers have again adopted mission-driven shopping is to offset high gas prices. The increase in visit duration hints at continued consumer demand for both retailers, Placer.ai observed, a critical factor ahead of the holiday shopping season peak.
A final element that shows the continued strength of both Target and Walmart is the visit share breakdown compared to rising competitors such as Dollar General, which has seen rapid store expansions in recent years. Still, the wider visit share has remained largely the same. Placer.ai characterized the stable visit shares as indicative of Walmart and Target resilience in the face of rising competition, especially given the unique positioning dollar stores have had as a result of the pandemic’s economic impact and recent inflation.
In total, Placer.ai insisted, Target and Walmart not only managed to navigate the pandemic environment effectively, but they also seem well positioned to face current economic headwinds.
