Wal-Mart Shoppers Buying More Discretionary Items

Wal-Mart Stores Inc.’s U.S. customers are spending more on discretionary items as payroll taxes decrease and gasoline prices plummet, Reuters reported last week.

The Bentonville, Ark.-based mega-retailer is seeing customers purchase luxury products such as sporting goods and bedding, using the money they have since those costs have declined, according to Wal-Mart US CEO Eduardo Castro-Wright.

The economic stimulus package included lower withholding taxes for many Americans. At the same time, gas prices are more than 30 percent lower this year than last year, Castro-Wright said at the recent Barclays conference.

Wal-Mart has drawn more customers during the recession as people look to save money on staple items like food and diapers. But it’s the discretionary items, not food, that make up the fastest-growing category at U.S. Wal-Mart stores.

In February, 17 percent of traffic growth at Wal-Mart came from new households, and the majority of those households have an annual income of over $50,000, noted Castro-Wright, adding that these new customers are spending more than the average Wal-Mart customer, who typically earns less.

"The average ticket for those customers is 40 percent higher than the rest of the chain," he observed.
This ad will auto-close in 10 seconds