THE WHAT? Walmart Chief Financial Officer Brett Biggs has warned that buoyed consumer spending in the U.S. could start to wane as government stimulus checks start to run out, according to a report by Bloomberg.
THE DETAILS? According to Biggs, the company’s comparable sales growth began to wane at the end of last month as consumers reached the end of their stimulus checks, which were first handed out in mid-April.
Speaking in an interview regarding its Q2 earnings, Biggs said, “Comps were not as strong in July as stimulus dollars likely had been spent by then. Consumers are still spending money but not at pace they were in the middle of the quarter.”
THE WHY? While U.S. consumers enjoyed the benefits of the stimulus checks, ongoing Congress debates regarding the size and timing of future cheques are said to be impacting lower income consumer spending power.
While there was a slowdown in demand, Walmart Q2 results beat industry expectations, with revenue to the three months ending 31 July reaching $137.7 billion.
Popularity of non-food items during the quarter were said to have been fuelled by the stimulus checks, with online e-commerce sales rising 97% in the quarter.
Biggs stated, “We started where we left off last quarter — general merchandise continued to be really strong through the quarter.”