U.S. retail giant Walmart (WMT) is offering bigger discounts to its staff to help them face rising costs and retain their skills.
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Walmart is expanding its current 10% employee discount to include nearly all grocery purchases online and in-store. The move helped its stock climb in early trading.
Work Grumble
The change has been made to help its employees cope with rising prices as a result of inflation and aligns its offering more closely with retail rivals such as Target (TGT) and Amazon’s (AMZN) Whole Foods.
The discount previously applied to fresh produce and general merchandise, such as clothing and toys, but excluded groceries such as milk, pasta, frozen pizza or meat, except during the November and December holiday-shopping season.
This has, reported the Wall Street Journal, been a “grumble” of Walmart workers for a number of years.
Indeed, Walmart Chief People Officer Donna Morris told staff in a letter that extending the discount to more goods year-round was “one of our most requested benefits.”
Walmart, as seen below, has around 2 million staff in total.
She said: “We’ve heard your feedback that these savings make a real difference for you and your families. And we have continued to hear that you would like to see this benefit expanded.”
Walmart’s roughly 1.6 million U.S. workers receive the benefit after 90 days of employment. Whole Foods offers workers a 20% discount on most in-store purchases from the first day of employment.
Target offers a 20% discount on fresh and frozen produce and some store-brand items and a 10% discount on most other goods.
Inflation Pressures
Figures out today showed that July’s Producer Price Index, which tracks wholesale prices and inflation at the production level, increased 0.9% month-over-month, well above the estimate of a 0.2% jump. That marks the biggest monthly gain since June 2022.
President Trump’s tariffs have been blamed for stoking inflation, and indeed Walmart itself has hiked prices as a result.
A faltering economy can also put pressure on job recruitment and retention. According to recent statistics the average retail retention rate is around 60%, meaning perks could be important in keeping skilled staff in place.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 30 Buy ratings. Its highest price target is $130. WMT stock’s consensus price target is $112.29, implying a 10.91% upside.
