Walmart, the largest retailer and private employer in the U.S., will serve as a valuable tool in gauging inflation when it reports earnings Thursday.

The retailer is a key indicator of how consumers are holding up, providing a sharper lens on household spending in comparison with the government's consumer price index, which showed that inflation ticked up more than expected in March. 

Telsey Advisory Group estimates the retail behemoth will have solid results during the first fiscal quarter as higher-income shoppers spend more at its stores because of inflationary pressures, the firm wrote in a note Friday. 

"Walmart should also benefit from trade down, as lower income consumers continue to shop value-priced categories and private brands, and upper income consumers spend more at Walmart in search of value," the analysts wrote. 

Last quarter, John David Rainey, Walmart's chief financial officer, elaborated on the uptick in richer customers.

"One of the biggest contributors in the quarter was in this income demographic from households that make more than $100,000 a year," Rainey said during the company's earnings call. "Our value proposition is resonating with customers, and they're clearly shopping us in new ways versus how they have historically."

Walmart shares are up 15% this year, outperforming the S&P 500's 9.5% rise. 

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Many chief executives have already told analysts their companies have taken a hit in profits from persisting inflation, which has fallen considerably from a peak of 9.1%, but progress has largely flatlined since the summer.  

To better cater to money-conscious consumers and boost traffic, companies have been competing with each other to roll out tantalizing promotions.

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For one, the head of Dine Brands, parent company of Applebee's Neighborhood Grill & Bar, International House of Pancakes (IHOP) and Fuzzy's Taco Shop, said it launched deals like $1 margaritas.

"The consumer sent a message this past quarter. It was a tough quarter for us, and it was a tough quarter for the restaurant industry overall," CEO John Peyton said during an appearance on "The Big Money Show." 

About 40% to 45% of its guests dined out less frequently in the first quarter, and when they did, they "managed their wallet more closely than in the past, finding our promotional offers and things like that," he explained. 

Aldi, meanwhile, recently announced it's cutting prices on more than 250 items through Labor Day to help consumers contending with "stubborn inflation."

McDonald's CEO Chris Kempczinski also told analysts on an earnings call last month the "consumer is certainly being very discriminating in how they spend their dollar" due to inflation. 

"And while it may feel  — it may be more pronounced with the lower-income consumer — I think it's important to recognize that all income cohorts are seeking value. And so our focus is on making sure, as I said, that we're offering strong value to our customers," Kempczinski said. 

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The challenge, though, is how to differentiate within an environment with so many companies offering promotions, according to Kempczinski. 

"I think the issue that we have in the U.S. is in an environment where everybody is out there with a value message," he said. "There's an opportunity for us to drive better awareness of what our value platform is."

Wall Street will digest two economic reports next week with the producer price index on Tuesday and the consumer price index the following day. 

FOX Business' Megan Henney and Alicia Warren contributed to this report.