Walmart Inc. (WMT) is seeing customers taking drugs like Ozempic put a little less food in their carts. Bloomberg reported that a Walmart executive said the retailer was seeing “slight changes” in the carts of shoppers buying diabetes and weight loss drugs Ozempic, Wigovy and other appetite suppressants.
Yahoo Finance reporter brooke dipalma Learn about this report and the potential impact that appetite suppressants can have on a company’s bottom line. For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
video transcript
– Let’s switch gears here. Walmart — A slight setback in shoppers, but not for economic reasons. The company’s U.S. CEO told Bloomberg that he is seeing an impact on shopping demand from people taking diabetes drugs Ozempic, Wegoby, and other appetite suppressants.
The retailer says it is seeing changes in its anonymous shopper demographic data. If you want to know more about this, talk to my girlfriend Brooke DiPalma, a Yahoo Finance reporter. So, so, Brooke, please break this down. What is Walmart saying and what impact are they seeing in some aisles?
Brooke DiPalma: Yeah. Good morning, Brad. Certainly, it’s remarkable, especially when America’s largest retailer is involved in this debate. US CEO John Furner said in the interview that there has been a slight change in the shopping behavior of drug users compared to the overall population.
The current change is that the size of the basket has shrunk slightly. They buy fewer pieces and end up with slightly fewer calories. But it’s worth noting that they also say it’s too early to draw firm conclusions about the drug. But we do know that Walmart is getting a boost from these kinds of drugs inside the company.
Walmart CEO Doug McMillon echoed the earnings report, noting that food, consumables, and health and wellness accounted for the total in the second half, largely due to the popularity of some GLP-1 drugs. He said he still expects the percentage to grow. And over the past few years, we’ve seen massive legislation built around these weight loss drugs. US sales of such medicines increased by 300% between 2020 and 2022.
It’s pretty incredible that just this year we’ve really started hearing about this topic. So we don’t know what that number will be in 2023. But, of course, we hear that so many celebrities are weighing in on this topic. So this is going to be a piece that we continue to monitor.
– That’s what we’ll continue to see here, Brooke. And we know that Walmart isn’t the only company paying attention and talking about Ozempic and how weight-loss drugs could affect its bottom line. What else are we learning about our competitors in this space?
Brooke DiPalma: Yes, Shauna. Well, I think a lot of snack food brands, food brands within Walmart, are thinking very seriously about this, and I’m sure in boardrooms and beyond and on Wall Street, they’re really trying to figure out what this is all about. . Vehicles for food and snack brands. Many say that these companies that consumers patronize, such as Hershey’s, Mondelez, Smucker’s and Hostess, which was recently acquired by Goldfish’s parent company Campbell, are probably snacking more than three times a day. There is.
They are the ones to watch for the potential effects of these drugs. Bernstein also notes the potential impact on alcohol consumption. They still need to be taken in very large amounts, but two potential threats are the side effects of consuming alcohol to lose weight and the active use of these drugs to control alcohol consumption. If used extensively, intake could be reduced even further, he said.
But again, it’s important to note that we are still in the early stages. It is predicted that nearly 7% of the U.S. population will be taking this type of weight loss drug over the next 10 years through 2025. However, these weight loss drugs are currently in short supply. It is still targeted at patients with type 2 diabetes. And we’ve seen employers and insurance companies withdraw these offers.
Therefore, there is still much to learn about the effects of these drugs on consumption behavior. Additionally, you will learn how exposure and supply affect these weight loss drugs.
– And the potential side effects of these weight loss drugs are clearly in focus here as well. Even for many Americans. Thank you, Brooke DiPalma.
