Walmart's grocery business reportedly benefits from the high prices of fast food.
John David Rainey, the company's chief financial officer, told CNBC on Thursday (May 16) that buying a meal at a quick-service restaurant (QSR) is more convenient than buying the ingredients needed to make the meal. “It's about 4.3 times higher,” he said. Meals at home.
“And that's benefiting our business,” he said, according to the report.
Rainey added that the gap between the two prices has widened as some food items have held steady or become cheaper, according to the report.
The news came on the same day that Walmart reported better-than-expected first-quarter profits.
During the company's quarterly earnings call on Thursday, both Rainey and Walmart CEO Doug McMillon attributed the increase in consumer spending during the quarter to the retailer's value proposition. He said that.
McMillon said during the call: [price] roll back. That's really helpful. In our food category, we're seeing even greater spread between eat-in, self-cook and eat-out, which we believe could help Walmart over the remainder of the year. ”
There are signs that “nice-to-have” items are slowing down across the economy, with consumers choosing to save money on those items and instead spend it on essentials and services.
For example, Starbucks faced headwinds from repeat business from occasional customers. Comp sales fell by 4%. Similarly, QSRs are facing headwinds as disposable income declines.
PYMNTS Intelligence found that consumers are also reevaluating non-essential spending as grocery store prices continue to be high.
“The New Reality Check: Paycheck to Paycheck Report.”
As for QSRs, McDonald's announced Friday (May 10) that it is encouraging franchisees to vote on implementing $5 meal deals to bring back customers who have left due to high prices. It was reported.
McDonald's CEO Chris Kempczinski said during the company's latest earnings call that the company needs to focus on affordability and that the company currently does not have a “national value platform.” said.