Walmart keeps growing and growing and …
Walmart came out with its second-quarter numbers and the retailer did not disappoint investors. The chain reported that same-store sales, excluding fuel, were up 9.3 percent during the quarter and online sales jumped 97 percent.
Walmart’s strong performance followed a first-quarter for which it reported a 10 percent gain in same-store sales and e-commerce growth of 74 percent.
Speaking on Walmart’s earnings call with analysts yesterday, CEO Doug McMillon said the retailer benefited from tailwinds, including the federal government’s stimulus payments and more people eating at home. The chain also saw sales increase as customers spent money on products to entertain themselves in their homes and also to fix them up.
He also noted that reduced store hours and out-of-stocks in some categories had a dampening effect on sales. Walmart recently announced that it is moving its closing time from 8:30 p.m. to 10:00 in 4,000 of its 4,700 stores. He also said that the chain experienced out-of-stocks in some states where COVID-19 cases were on the rise.
Mr. McMillon said that the retailer has completed the integration of its store and online merchant teams as it continues on its “path to transform into an omnichannel organization.” The company pointed to improvements in online margins as an indication of a more balanced product mix and operational efficiencies it has achieved.
He also touched on reports that the retailer is getting closer to launching Walmart+, a rebranding of its Delivery Unlimited Grocery service.
“We have been testing membership with delivery on limited subscription since late last year. That customer offer was limited to a grocery and consumables delivery service as the reason to sign up,” he said. “Since that launch, we have proven to ourselves that we can pick and deliver a broad set of categories across the supercenter, not just food and consumables, but a wide assortment of general merchandise. We think that assort[ment] breadth and our ability to deliver with speed nationally combined with a few other benefits for customers will result in a compelling proposition.”
John Furner, president and CEO of Walmart U.S., told analysts that its online marketplace performed well during the second quarter. He noted that Walmart Fulfillment Service is up and running and should further add to the ability of third-party sellers to achieve the types of performance that build repeat business.
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DISCUSSION QUESTIONS: What is your assessment of Walmart’s progress on its “path to transform into an omnichannel organization?” Where do you see the biggest opportunities — merchant team integration, marketplace sellers, subscription plan, etc. — for Walmart to establish and maintain a competitive edge over its retailing rivals?