over 1 year ago • 3 mins
Walmart, the world’s biggest retailer, posted better-than-expected quarterly results on Tuesday.
What does this mean?
Hopes weren’t exactly high for Walmart, which issued its second profit warning in 10 weeks at the end of last month. But the company’s discounter reputation helped it expand beyond its lower-income regulars to bring in inflation-pressed higher-income customers. In fact, around three-quarters of Walmart’s market share gain in food came from customers with household incomes of over $100,000 a year. So while inflation-hit shoppers cut back on nice-to-haves like clothing and electricals, Walmart’s sales and profit still both beat expectations. There was relatively good news going forward too: Walmart raised its full-year profit outlook from where it was just three weeks ago, saying it’s now expecting its profit to fall no more than 11% this year.
Why should I care?
The bigger picture: Watch this space.
Walmart is looking to fix that drop-off in profit in part by adding new – ahem – streams of income: the company announced earlier this week that it’ll add Paramount Global’s ad-supported streaming service as a perk of its membership program. Walmart will be hoping the partnership will help Walmart+ – which offers perks like free shipping and discounts – win customers from Amazon, which gives its subscribers unlimited access to Prime Video.
Zooming out: Come one, come all.
Walmart wasn’t the only US retailer to impress investors on Tuesday: Home Depot said there was still strong professional demand for home improvement projects last quarter, which helped cushion the impact of fewer overall store visits. Both that and higher prices pushed Home Depot’s net sales up by a better-than-expected 7% from the same time last year, marking the company’s highest-ever quarterly sales tally on record.
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Data out on Tuesday showed that UK job openings fell for the first time in almost two years last quarter.
What does this mean?
Even as the UK economy has faltered, the country’s jobs market has been holding up remarkably well. But the slowdown seems to finally be having an impact: there were just 160,000 more people in work last quarter than the quarter before – far fewer than the 256,000 economists were expecting. Likewise, the number of jobs employers were looking to fill fell by around 20,000, representing the first drop in the metric since the peak of the pandemic. And while regular wages were 4.7% higher than they were the same time last year, they actually fell by 3% when adjusted for inflation – the sharpest drop on record.
Why should I care?
The bigger picture: Stock up on some Frosted Flakes.
UK households are definitely feeling the squeeze: data out on Tuesday from consultancy Kantar showed that food price inflation has hit a level not seen since the financial crisis in 2008. In fact, the average spending on groceries is expected to be £533 ($641) higher this year than last. So Brits are increasingly switching to cheaper alternatives, which might be why sales of own-label ranges now make up a record share of all food spending.
For you personally: Buy a house, sell your soul.
As if the above wasn’t making it hard enough to get on the housing ladder, UK home prices also hit a record high last month. But Perenna thinks it has the solution: the UK mortgage startup was granted a license this week to offer 50-year fixed rate mortgages. It’s determined to help young people live a life of freedom in a place they can call their own, even if it has to lock them into a half-century of debt to do it.
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