Shares in retail giant Walmart (WMT) were higher today as it slashed the cost of its membership plans ahead of the Black Friday sales.
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Discount Deals
The group is offering customers a 50% discount on the cost of an annual Walmart Plus membership. That brings the price down to $49. But new subscribers have to hurry as the offer only lasts until December 2nd.
With the deal, members can get free same-day delivery, free shipping, and early access to those Black Friday sale deals. They also get access to limited-time offers, like five free months of Apple (AAPL) Music.
When it comes to Black Friday itself, Walmart plans to begin the extravaganza this Thursday for Walmart Plus subscribers. For non-subscribers, the early deals kick off a day later and will run both in-store and online through November 16th. A second wave of deals takes place on November 28th and lasts through to November 30th.
Shoppers will be able to get their hands on deals such as a 4K Google TV for $998, down from $1,798 and a L’ange hair styler for $48.30, down from $119.
Crucial Period
The sales season is a crucial period for retailers like Walmart as well as rivals such as Target (TGT) and Amazon (AMZN). Even more so this year as there are five fewer shopping days between Thanksgiving and Christmas.
Reducing its membership fees will aim to steal a march on its rivals and tempt consumers hit hard by economic and job uncertainty. A recent survey from Deloitte found that seventy-seven percent of people surveyed said they expect higher prices on holiday items this year, up from 69% in 2024. Consequently, consumers plan to spend an average of $1,595 during the holidays this year, 10% less than they spent a year ago.
The spending blues cut across all household income groups and nearly all generations, Deloitte found.
Walmart will, however, hope that offering such a major discount will reinforce its image as a value retailer during troubled times. Its sales have already held up well this year with Q2 demand increasing by 5.6% in constant currency, with e-commerce sales growing 25% globally. Walmart US and Sam’s Club US led with 26% growth in e-commerce sales.
It will be hoping for something similar when it reports Q3 earnings next week.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 28 Buy ratings. Its highest price target is $129. Its consensus price target is $116.15, implying a 12.16% upside.
