Americans Use Their $1,200 Stimulus Checks on Nonessential Items at Walmart, Target: Report

May 21, 2020 Updated: May 21, 2020

Major retailers have said that a number of Americans are spending their stimulus checks on non-essential items such as clothes, toys, and consumer electronics.

“Call it relief spending, as it was heavily influenced by stimulus dollars, leading to sales increases in categories such as apparel, televisions, video games, sporting goods and toys,” Walmart CEO Doug McMillon said during the company’s earnings call on Tuesday, according to MarketWatch.

“Adult bicycles started selling out, as parents started to join the kids. An overlapping trend then started emerging related to DIY and home-related activities,” he added. A number of consumers bought bandanas and sewing machines to make their own masks, McMillon added.

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People wearing masks and gloves wait to enter a Walmart in Uniondale, N.Y., on April 17, 2020. (Al Bello/Getty Images)

Walmart spokesman Randy Hargrove told the news outlet that before the checks were sent out on April 15, there “was not as much demand” for nonessential goods at the store. However, sales took off “towards the end of the quarter,” he said.

Also, Apple saw an increase in demand in its products “across the board,” CEO Tim Cook said. “A part of it is due to just our new products,” Cook said, adding that another part is “due to the stimulus programs taking effect in April.”

Target also saw a “rapid increase in traffic and sales” for discretionary goods due to the pandemic checks, CEO Brian Cornell remarked on Wednesday, according to the report.

“We certainly saw an uptick as we reported starting on April 15, as those checks arrived across America,” Cornell added.

Some consumers are “still seeing the benefits of the stimulus check,” he added, saying that people are shopping across all categories including apparel.

Walmart’s online sales in the U.S. jumped 74 percent for the quarter ending April 30, which captured the brunt of the pandemic. Same-store sales rose 10 percent at U.S. Walmart stores on strong sales of food, health, and wellness goods, according to The Associated Press.

Unlike its online rivals such as Amazon, Walmart enjoys an extensive network of nearly 5,000 physical stores and a variety of delivery and pick-up options that it ramped up to meet the crushing demand for essential items from paper towels to canned food. Walmart’s reputation for low prices also helped as the unemployment rate has spiraled to a high level since the Great Depression.

“Having a wide range of fulfillment options, including delivery to home, collection from store—and by using stores for fulfillment—allowed Walmart to ramp up capacity in a way that many other players struggled to do,” said Neil Saunders, managing director at GlobalData Retail. “We also believe that by using stores effectively, Walmart mitigated some of the higher costs associated with the online channel.”

The Associated Press contributed to this report.