Walmart is seeing sales grow stronger than expected as even affluent customers flock to the discounter in times of inflation. The retailer has suffered a drawback though, as it settled for three billion dollars in a lawsuit over the sale of painkillers.
The world’s largest retailer saw sales rise 8.7 % to 153 billion dollars in the past third quarter, which was better than expected. Walmart is gaining market share in its American home market despite – or thanks to – high inflation: as consumer prices rose 7.7 % in the US compared to a year earlier, Walmart’s focus on low prices and deep promotions managed to attract more – and also more well-to-do – shoppers.
As a result, Walmart now expects a 5.5 % rise in sales and a 6 to 7 % fall in profits for the full financial year, which is quite a relief for investors. In July the retailer had issued a hefty profit warning with an expected 11 to 13 % fall in profits, which now turns out to be premature.
The company did post a net loss of 1.77 billion dollars in the third quarter, due to a settlement: like pharmacy chains CVS and Walgreens, Walmart was sued in the US opioid crisis, for negligence in selling addictive painkillers. The retailer chose a 3.1 billion dollars settlement over a lawsuit.