Published on: August 18, 2017
Walmart yesterday came out with its second quarter results, saying that total revenue rose 2.1 percent to $123.4 billion, with US same-store sales going up 1.8 percent. However, Q2 net income was down 23.2 percent to $2.9 billion.
reports, “Wal-Mart's e-commerce sales grew an impressive 60 percent in the latest period, on top of last year's 11.8 percent growth. However, this quarter's pace was slightly slower than the first quarter, when e-commerce sales rose 63 percent. But prior to that, in the fourth quarter of last year, online sales were up 29 percent.”
The Wall Street Journal
writes that “the strong sales figures come at a time of stiff competition among retailers facing Amazon.com Inc. While U.S. consumer spending appears strong, according to July sales data at retailers and restaurants released Tuesday, some apparel and department-store chains are struggling with customers’ changing shopping habits. U.S. grocers, of which Wal-Mart is the largest by sales, are battling over prices.”
And, the Journal
writes, “Wal-Mart’s U.S. gross margin fell and operating expenses rose 3.9% in the second quarter. ‘We are not at the place we want to be from an expense standpoint,’ Wal-Mart finance chief Brett Biggs said in an interview.”
There are numerous stories about Walmart’s past and future this morning:
• USA Today
writes this morning that Walmart says that it is “delivering online grocery orders from more than 900 stores with ‘strong results’ in the early going, as the company's rivalry with Amazon intensifies.” The retailer says it expects to expand grocery delivery to a total of 1.100 locations by the end of the year. The paper says that “Greg Foran, CEO for Walmart U.S., said that the retailer will ‘watch closely’ if Amazon ramps up its online grocery business. But he says he welcomes the competition, not only from Amazon, but from other potential rivals, such as discount grocery chain Aldi and German chain Lidl which are also expanding in the U.S.”USA Today
also quotes Marc Lore, CEO of Walmart eCommerce U.S., as saying, “We're seeing that customers are coming into the store when they come to pick up items. And we're saving costs by not having to pay for last mile delivery'' to people's homes.”
• The Washington Post
writes that Walmart said yesterday that “food sales had grown to their highest level in five years, as Walmart expands its grocery business both in stores and online by adding more organic produce.”
• In a separate story, CNBC
writes that “Wal-Mart's second-quarter results make it crystal clear the retailer is committed to growing its e-commerce business, with Jet.com founder Marc Lore at the helm of it all.
“Faced with the threat of Amazon encroaching on its turf, Wal-Mart has been rolling out initiatives like ‘easy reorder,’ free two-day shipping with no membership required, and an online grocery service, which is slated to hit 1,100 Wal-Mart stores this year … Offerings like ‘ship-from-store,’ discounted pick up in store and Wal-Mart's associate delivery tests are (seen by analysts as) ’competitive weapons’ that will help the traditionally brick-and-mortar retailer steal a larger share of the online market.”
• Business Insider
reports: “When Walmart acquired Bonobos and Modcloth, confusion reigned over how these trendy, upscale brands meshed with America's no-frills most affordable retailer.
“Now, it's increasingly clear that these investments were geared toward its Amazon competitor - Jet.
“You'll likely never see a Bonobos or Modcloth product in a Walmart store or on Walmart.com. Bonobos and Modcloth will, however soon be offered on Walmart-owned Jet, according to a conference call with journalists to discuss second quarter earnings … This is a clear signal of how Walmart.com and Jet.com will diverge. While Walmart is a mass-market retailer that appeals to every demographic, Jet will be geared toward the urban millennial customer.”
• Not everybody is convinced, however, and the Los Angeles Times
reports that “even Wal-Mart e-commerce communications Vice President Dan Toporek acknowledges that Walmart.com and its massive inventory of 50 million distinct products will not attract the cool kids who are — or were — shopping at places such as ModCloth … ModCloth and Bonobos are being cyberbullied by their fans online, who are making fun of the brands for what they see as selling out to the corporate machine.”
Walmart has been promising that while it may own these “cool kids” brands, it has no intention of meddling in their operations and management. “Bonobos and ModCloth will not get touched,” Toporek says. “They will operate the way they always have.”