BENTON, Arkansas: As shoppers are taking advantage of its affordable groceries and other essentials, Walmart raised its annual sales and profit targets.

With Americans coping with ongoing food price inflation, Walmart has been keeping grocery prices low to compete against rivals Target and Kroger.

Data from the Commerce Department released last week showed that food prices were 7.1 percent higher than one year ago.

Along with asking suppliers for the lowest prices, Walmart has also remodeled its Supercenters and redesigned its website and app.

It has further invested heavily in membership programs and its warehouse business, Sam's Club, which offer free delivery and pickup and other benefits, such as a 10 cent discount on gas at the pump at Walmart locations.

On a post-earnings call, CEO Doug McMillon said these efforts have helped the US retail giant gain wealthier households and Gen Z customers, who are looking for both low prices and convenience, such as grocery delivery and curbside pickup.

Sales at the remodeled stores were "a couple of percentage points" higher than those not remodeled, said CFO John David Rainey.

In the first quarter ending 30th April, overall sales at Walmart's US stores rose 7.4 percent, excluding fuel, surpassing expectations of a 5.25 percent increase.

In an interview with Reuters, CFO John David Rainey said, "As consumers have less purchasing power, less buying power, we are seeing more of their income, their wallets being devoted towards food, and less towards general merchandise."

Recent economic data shows that consumer spending has remained stable, despite inflation and concern of an economic recession this year.