Published on: May 17, 2019
In two important metrics of continued and strategic growth, Walmart said yesterday that its Q1 US same store sales were up 3.4 percent, the biggest increase it has seen in that number in almost a decade, and that its online sales were up 37 percent, with significant growth coming from its click-and-collect offering.
In other Walmart coverage yesterday:
• The Washington Post
writes that “Walmart is aggressively pursuing other potential revenue streams that will allow it to capitalize on its status as a both a physical store-based chain and an online retailer. In particular, it is building a digital-advertising business that uses data from both store purchases and visits to its website to help brands target a certain audience.
“And even when Walmart is fighting on turf that is more traditionally Amazon’s, we see hints that it is doing a better job of keeping pace. When Amazon announced recently it was working to go to one-day shipping as the standard for its Prime program, Walmart essentially revealed in a tweet the following day that it was soon to launch something similar.”
also notes that “Walmart says its next-day shipping on a selection of up to 220,000 items won’t add to its costs. That looks good next to Amazon’s announcement that its shift to one-day Prime shipping would cost $800 million in the current quarter – and is likely a relief to investors who have been understandably skittish about how much Walmart’s operating margins have shrunk in recent years.”
• The Wall Street Journal
reports that Walmart, like a lot of US retailers, could face rough seas ahead: “Walmart faces higher potential product prices after the Trump administration last week increased tariffs on about $200 billion of goods imported from China to 25% from 10% and threatened a further set of tariffs on all Chinese imports. Executives have said they are working to bring in some imports earlier than previously planned ahead of rising tariffs,” but they’ve also said that unless the trade war is ended, consumers should expect to pay higher prices on a wide range of merchandise.
Walmart CFO Brett Biggs said yesterday that “we want to manage margins with customers and shareholders in mind. We have mitigation strategies that have been in place for months. But increased tariffs will increase prices for customers.”
reports on how, in CEO Doug McMillon’s words, Walmart is becoming more of a “digital enterprise.”
“It’s testing a retail lab in New York using artificial intelligence,” CNBC
writes. “It recently, for an undisclosed amount, acquired Silicon Valley-based Polymorph labs, with the goal of using the start-up’s technology to make advertising with Walmart easier for small brands.
In February, it bought Aspectiva, a start-up that looks at a customer’s browsing behavior and helps make product recommendations, again not disclosing the cost of that deal.
“It’s adding veterinary clinics to its stores and runs an online pet pharmacy now. And it continues to incubate its own brands — during the latest quarter it launched one that sells home furniture, called MoDRN.”
In addition, “Hoping to cater more to younger consumers, Walmart has been on a spree acquiring retail brands that were born on the internet, many of them owning specific categories, such as camping gear … So far, Walmart has bought brands in businesses ranging from lingerie to art to plus-sized fashion for women and men’s apparel … Walmart also is partnering with digital brands. During the latest quarter, it teamed up with Kidbox to launch a subscription box for children’s apparel, as one example.
“Moving forward, Walmart is looking more to do deals with brands that can sell on Walmart.com, in Walmart stores and directly to consumers,” looking to cut across all three channels.
In many ways, the story says, “Walmart is becoming more like Amazon, as Amazon becomes more like Walmart by opening stores and trying to sell more groceries.”
• Fox Business
writes that as Walmart rolls out its next-day delivery service around the US, “none of the items ordered will come from one of the company’s 4,700 U.S. locations. Instead, the items ordered off the website will come from one of the six fulfillment centers that’s located closest to the customer.”
“We can offer fast, convenient shipping options because we’ve built a network of fulfillment assets that are strategically located across the U.S.,” Walmart said in a prepared statement. “We’ve also done extensive work to ensure we have the right products in the right fulfillment centers based on where customers are located and what they’re ordering.”
reports that Walmart “is mulling an initial public offering for its Asda unit, a listing that that could value the U.K. grocer at as much as an estimated 8.5 billion pounds ($11 billion).”
This news comes in the wake of UK regulators’ decision not to permit a merger of Asda with Sainsbury, saying that such a deal would be anti-competitive and lead to higher consumer prices.