retail news in context, analysis with attitude

Walmart said yesterday that in a first quarter when US same-store sales went up 2.3 percent, its e-commerce sales went up 33 percent compared to a year ago. The strong e-commerce performance also was an improvement over the 23 percent increase seen in the previous quarter and a move in the right direction for a retailer that has projected 40 percent e-commerce growth for the current year.

The Wall Street Journal reports that Walmart plans to “offer home grocery delivery from 800 stores by year’s end, adding to around 2,100 stores that let shoppers buy groceries online and pick up those orders in store parking lots.” Walmart stores in Chicago will begin delivery next week, it has been reported, and the Journal notes that the e-commerce “results eased some fears earlier this year that growth on the e-commerce side of its business was slowing.”

The Journal also notes that “Walmart continues to eat into profits with investments to improve stores and grow online in the U.S. and internationally. In the first quarter, Walmart posted a profit of $2.13 billion, down from $3.04 billion last year.

“This month Walmart agreed to take control of India’s largest e-commerce company, Flipkart Group, for $16 billion, betting that growth in the South Asian market will make up for the short-term losses from taking on the unprofitable startup. It also recently agreed to sell control of its U.K. chain Asda to J Sainsbury PLC, and, according to people familiar with the matter, it is in talks to sell a majority stake in its Brazilian operations.”

It is, the New York Times writes, “an expensive proposition. For a company with a long history of squeezing expenses from its stores, Walmart’s operating profit is now under pressure, as it makes investments in both e-commerce and in improving its big boxes. Earlier this year, the company raised its starting wage to $11 an hour to better compete for workers in the tightening labor market.”
KC's View:
This is a fascinating time for Walmart - reorganizing a number of its global investments, building an Amazon-like e-commerce business in the US, acquiring or partnering upscale brands as a way of spreading its bets around, and figuring out how to strike the right balance between bricks0-and-mortar and digital retailing … all while trying to keep investors happy, or at least satisfied.

Sort of like this guy.

The stakes just got a little higher with Kroger’s deal to exclusively bring Ocado robotic technology to the US … which certainly should improve its competitive position. (See story below.)

Fascinating time for everyone … though to some, these moves have to be seen as enormously threatening. Which only means, if they want to stay in business, that they have to be effective, efficient, aspirational, inspirational and absolutely relentless … every minute of every day.