Walmart makes the big-box retail business look easy. The Arkansas-based retailer long known as a discount store has not only retained its budget-hunting customer, but it’s now also going after the wealthier crowd of competitors Target and Amazon.

The company reported 6% revenue growth to $161.5 billion and a comparable sales growth of 3.8% in its first quarter on May 16, which it said was driven by upper-income shoppers. Walmart was so optimistic it raised its outlook for growth to 4% from 3% for the year and expects adjusted earnings to be $2.37 per share, up from $2.23.

“We are seeing customers trade into Walmart,” Chief Financial Officer John David Rainey told Bloomberg on May 16. “We’ve historically been thought of for value, but now it’s value, quality and convenience.”

Walmart attributed its growth to its 21% surge in e-commerce revenue, led by curbside pick-up and delivery orders—a service typically favored by wealthier consumers looking for convenience. It also gained market share in groceries as consumers continue to stray from discretionary purchases in favor of just buying the essentials.

Customers making over $100,000 have contributed the most to Walmart’s market share takeover, according to analyst Neil Saunders of GlobalData, and the retailer’s strategies of late reflect its desire to keep that the case. In April, Walmart announced the release of the premium own-brand food line bettergoods, with a focus on bright packaging and plant-based items to appeal to Gen Z and bougie shoppers. Earlier this year the retailer remodeled and revamped 800 locations, stocking wider shelves with $50 silk sleep masks and $230 duck breast. The company plans to remodel 900 stores in 2024, CEO Doug McMillon said in the company’s earnings presentation.

These tactics are on top of its consistent discount efforts, which McMillon said have been key to Walmart continuing to resonate with its consumer base—particularly as consumer sentiment reaches a six-month low despite cooling inflation—and have kept analysts upbeat on the company.

“Despite a volatile consumer spending backdrop, increased concerns on the health of the low-end consumer, and the relative resiliency of shares of [Walmart], we approach its [first quarter] print with optimism,” Deutsche Bank analyst Krisztina Katai wrote.

Clawing at retail’s top dog

While Walmart has moved to appeal to higher-income consumers, historically higher-income-focused Target has gone in the opposite direction as the company lags in sales. Regarded for its cheap-chic, Tar-jay reputation, the Minnesota retailer has pivoted to lower-income customers, launching in February its “dealworthy” budget brands with most items under $10. It’s not an all-in endeavor for Target: The company also launched its own paid membership, Target Circle 360, mirroring Amazon Prime and Walmart+ efforts to tap into well-to-do customers looking for convenience.

Amazon has made similar moves to compete with Walmart’s e-commerce rally, introducing last month an unlimited grocery delivery service under $10 for Amazon Prime members, with the same service available for EBT cardholders without Prime for $4.99. Last July, Walmart rolled out Walmart+ Assist and cut the price of its paid membership in half for those receiving government assistance. Walmart’s grocery delivery services eclipsed Amazon’s since 2019, with Insider Intelligence predicting recently that Walmart orders will make up 26.9% of online grocery sales by the end of 2024, with Amazon making up 18.5%. While the big-box retailer has expanded to 4.4 billion units delivered in the past 12 months, Amazon Prime reported last month it delivered 4 billion items for same or next-day delivery in the U.S. in 2023.

Other factors are keeping Walmart on top: The company grew its advertising business 24%, a venture with higher margins than retail. It laid off hundreds of its corporate staff earlier last week, relocating many remote employees to its Arkansas headquarters, a decision that came on the heels of its move to shutter all 51 of its health care clinics. Walmart decreased U.S. inventory 4.2% as an additional cost-cutting measure. But Oliver Chen, an analyst at TD Cowen, told Bloomberg in March that Walmart’s real advantage lies in its potential to tap into customers across tax brackets.

“This is about modernizing the brand and making it seem chic and cool,” Chen said. “Walmart is good at basics and wants to be known for more than that — and sell more than that.”