Despite Walmart's e-commerce push, the retailer is seeing a decline in website visits, but in-store grocery sales are booming
Walmart
- Through November, Walmart saw a roughly 8% decline year-over-year for daily website visits, according to Similarweb.
- Meanwhile, in-store traffic picked up by about 1%, according to estimates from Placer.ai.
- An analyst says inflation and changing thoughts around COVID may be the cause for these changes.
Early in the pandemic, Walmart customers got used to buying items online from the comfort of home – while wearing their pajamas. But those days appear to be waning.
Even as the retail giant has made major efforts to bolster its e-commerce business, it still saw an 8% decline in average daily visits to its website this year through November compared to last year, according to data from Similarweb, a web analytics company.
A little over 14 million people have visited walmart.com daily so far this year, according to Similarweb — down from the roughly 15.3 million and 15.6 million visitor averages in 2021 and 2020, respectively. And of course, with COVID-19 changing shopping trends, walmart.com saw a 46% increase in traffic in 2020 from the year prior.
But while online shopping has dipped this year, more people have been flocking back to Walmart stores. According to estimates from Placer.ai, a location-data company, Walmart stores saw a 1% increase in the average number of daily shoppers through December 4 compared to the same year prior. Walmart US food sales increased about 14% year-over-year in the most recent quarter, per a company SEC filing.
Walmart declined to comment for this story.
The changes in shopping behavior are a reflection of shoppers both having less fear surrounding the coronavirus pandemic and looking for low prices amid inflationary pressures, according to Brian Yarbrough, an analyst with Edward Jones.
Yarbrough told Insider that food has been the fastest growing part of Walmart's business for the past few quarters, as inflation-wary customers have looked to buy the more affordable grocery products that the retailer provides and spend less on discretionary items, like toys. But those customers are typically not buying food online, according to Yarbrough.
"So I think you're seeing traffic drop off because people aren't spending as much on discretionary type items, which is what they've been buying online," he said. "And they're spending more on food and going in the store."
Online food sales slowing across retailers
Walmart is the top US grocer. It accounted for one-quarter of all sales in 2021, according to Euromonitor. That's more than three times the total for Kroger, its nearest rival. And it is also one of the most popular online grocery shopping destinations along with Amazon, according to Coresight's "U.S. Online Grocery Survey 2022" report.
But like its rivals, walmart.com is seeing customers head online to buy groceries at a much slower clip than at the beginning of the pandemic.
Across all US grocers, online sales fell 10% year-over-year to $7.7 billion in November, according to a survey from software company Mercatus and consultancy Brick Meets Click. Fewer households placed orders, while those that did ordered less frequently and bought less, according to the survey.
Still, mass retailers such as Walmart fared better than traditional grocers such as Kroger, David Bishop, partner at Brick Meets Click, said in a statement on the survey. The cost of delivery has driven some shoppers to switch to mass retailers, where fees tend to be lower, Bishop said.
Consumers are trading down from higher-priced stores for groceries and other consumables, and that's led to more foot traffic at Walmart and Dollar General, Jefferies analyst Corey Tarlowe wrote in a Tuesday research note.
Both chains "have noted observing higher-income consumers trading into their stores," Tarlowe wrote.
"Consumers are looking to maximize their value," he added.
Walmart has pushed ecommerce growth in 2022
The slowdown in customers visiting walmart.com certainly isn't from a lack of effort by the retailer.
For the three Mondays preceding Black Friday in November, Walmart offered early savings deals exclusively online. The retailer also launched a splashy Cyber Monday holiday ad campaign with the cast of the Office Space movie.
Walmart has been trying to entice third-party sellers to its platform with new tools and features.
And the retailer has been making major pushes to get customers and employees to sign up for Walmart+, the retailer's response to Amazon Prime. The membership platform that launched in 2020 incentivizes online shopping by offering free delivery.
Though Walmart might not be seeing the record 97% year-over-year ecommerce growth rate it had in the second quarter of 2020, Yarbrough said he still expects online shopping will "outpace" in-store shopping in the years to come.
"I just don't believe the long-term trajectory of more and more businesses moving online has changed," he said.
Got a tip about Walmart? Ben Tobin can be reached by email at btobin@insider.com or via the encrypted app Signal or text at (703) 498-9171.
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