Walmart's Scenario Apparel Targets Amazon's Fashion Share

Walmart is launching a new clothing line this week, aiming to pull younger shoppers away from Amazon and specialty chains.

The retailer's Scenario brand hits stores and its website with most items priced under $25, The Wall Street Journal reported Sunday. The move extends a push Walmart began nearly a decade ago to sell higher-margin apparel alongside its core grocery and household goods.

Denise Incandela, who became executive vice president of fashion for Walmart U.S. in 2021, told the Journal the company realized it was missing a piece of its customers' spending. Internal data showed shoppers who bought clothes at Walmart spent 80% of their apparel dollars at higher-priced retailers. "We knew we weren't servicing all their closet needs," Incandela said. "While our customer gave us credit for extraordinary value, they weren't giving us credit for style and quality."

Walmart has gradually shifted its mix toward higher-priced items over the last five years, according to internal documents cited by the Journal. More of the money customers spend on clothing at Walmart now goes to items priced at $25 or above. The company has also attracted more higher-income households during that period.

The push comes as Walmart confronts a tougher consumer backdrop. CEO John Furner said on the company's most recent earnings call that shoppers are feeling pressure, particularly after higher fuel costs forced more visible spending trade-offs in June. "Customers tell us they're still feeling some pressure," Furner said. "But it's clear customers are looking for value and convenience, and they want things fast."

Walmart's same-store sales grew 2.6% in the most recent quarter, the slowest pace in nearly six years, partly due to drug price deflation.

The apparel market has become a battlefield where price alone no longer decides the winner. Retailers spent the past decade training consumers to expect constant discounts, making it harder for any single chain to command full-price sales. Walmart's bet is that a dedicated brand with a consistent price ceiling -- nothing over $25 -- can carve out a permanent spot in shoppers' wardrobes where its generic private labels have not.

Scenario will compete directly with Amazon's growing fashion business and with chains like Gap and Target that have already invested in exclusive apparel brands. Walmart's advantage is its 4,600 U.S. stores and the foot traffic those locations draw from customers buying groceries and household goods every week.