WalMart rush forward
By far the world's largest retailer, American Wal-Mart continues to grow fast, but without affecting the bottom line negatively. The company appears to be in complete control. Simply impressive.
Walmart Inc
- CEO: Mr. C. Douglas McMillon
- Head office: Bentonville, USA
- Employees: 2 100 000
- Market value: 675 856 MUSD
(In NOK seven trillion five hundred and fifty-eight billion, five hundred and seventy-nine million, six hundred and eighty thousand)
As the reigning low-cost retailer, consumer caution helps the Arkansas giant see its 5.3 per cent US same-store sales growth last quarter.
Walmart is taking share from rivals, and executives pointed out that three-quarters of the gains were with households earning more than $100,000. Better-off consumers are trading down to Walmart. A fact the company attributes in part to improved home delivery and smart pick-up options.
The careful consumer is on the agenda for almost every other big retailer reports these days. Amazon notes that customers are looking for better transactions and are price sensible some are trading downwards.
The world’s largest retailer posted third-quarter sales of $169.6bn, up 5.5% year on year, and raised its annual outlook. Operating income also beat expectations, growing by 8.2% to $6.7bn, lifting its stock to a new all-time high.
240 million customers every week
Walmart serves as the dominant retailer in the United States, with its strategy based on superior operating efficiency and the lowest prices. This drive robust store traffic and product turnover.
Walmart increased its low-price business strategy by offering a convenient one-stop shopping destination with the opening of its first supercenter in 1988.
Today, Walmart operates over 5,200 stores in the United States, including Sam’s Club and over 10,000 stores globally. The retailer serves around 240 million customers globally each week.
Walmart has been gaining market share among customers across a variety of income levels in recent quarters, and executives have said the retailer's combination of price and convenience has made it a destination for American consumers.
The company's e-commerce and advertising operations, two of its fastest-growing segments, saw revenue rise by 27% and 28%, respectively, in the quarter. Analysts have said growth in Walmart's high-margin digital advertising business could help offset the net losses Walmart is still recording in e-commerce and improve the company's overall margins.[i]
Concerned about Trump’s trade policy – market does not care
"We're concerned that significantly increased tariffs could lead to increased costs for our customers at a time when they are still feeling the remains of inflation," a Walmart spokesperson said.
However, the stock market does not seem to care and sends Walmart shares to all time high.
Trump has vowed to make tariffs, which are a fraction of U.S. tax collections, central to his economic agenda. Executives have been increasingly fielding questions on the subject, with many noting ongoing efforts to continue to diversify their supply chains, particularly away from China, Trump's top target.
Trump has floated the idea of 60% tariffs on China, the world's largest exporter, and universal tariffs of 10% or more, which he says is necessary to eliminate the U.S. trade deficit.
Source: Morningstar/Nordnet, Reuters, FT, Wal-Mart Inc.
[i] Walmart's advertising business is primarily driven by Walmart Connect. This is Walmart's in-house advertising platform designed to help brands engage with shoppers across its wide-ranging digital and physical stores. In 2023, Walmart Connect generated $2.7 billion in global ad revenue.