Both Walmart [WMT] and Target [TGT] reported strong results this quarter. Walmart results were highlighted by accelerated comps in grocery, electronics, and seasonal/outdoor from warm weather compared to Q1. As for Target, it posted a 6% increase in traffic, and referenced the Toys 'R' Us closures as the main contributor to this bump. I took a closer look at our datasets to uncover insights that support these growth factors, from event-driven to regional impacts.
I started by analyzing TGT and WMT sales around Prime Day versus normal values in June/July to determine what the Tuesday of Prime demonstrated versus a normal Tuesday in June/July.
First, our Credit and Debit data indicated that the 4th of July was more meaningful for TGT and WMT (left axis) than Prime Day when you analyze all sales (in-store and online). However, there is a distinguishable bump around Prime Day for Target.
Focusing exclusively at ecommerce performance via the Credit and Debit data reveals that Target’s online sales received almost as meaningful of a bump as Amazon. Walmart also had one of their best days of the quarter (though less of a bump) on Prime Day.
Next, I considered which regions of the country looked strongest for brick and mortar performance using our Segment Performance Reports. WMT’s quarter-over-quarter results accelerated the most in the Northeast, Midwest and Southeast (2 of 3 biggest regions in our data, and all have weather bumps). The Southwest was roughly inline, and the Pacific and Rocky Mountains underperformed. TGT’s quarter-over-quarter performance accelerated the most in the Midwest, Southwest, and Rockies, was inline in the Southeast and below average in the Pacific and Northeast.
Questions that followed after analyzing these results concerned comparable sales for each retailer. Walmart closed several Sam’s Club locations last year, which helped them in the wholesale segment, but they also opened 58 ecommerce pickup locations year-to-date. They had roughly 11 ecommerce pickup stores in the comparable base in Q1 and about 50 in Q2. Although that is only around 1-2% of their 5300 US stores, they are likely some of the highest comping pieces since they are new and online focused. As for Target, they are actively remodeling stores and attribute a portion of their lift to the remodeled locations.
To summarize, Target and Walmart’s unexpected results can be attributed to a few key factors:
- July 4th was the biggest day for in-store sales, while Prime Day’s pickup improved ecommerce performance, especially for Target.
- The Midwest for Target and Northeast for Walmart accelerated in-store sales the most of any US region.
- Target’s remodeled locations and Walmart’s new ecommerce pickups have been cited as contributors to higher traffic this quarter.
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