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Walmart's Fight Against Amazon Is Picking Up Steam
[Forbes] In Walmart’s bid to take on Amazon, the world’s largest retailer once again showed it's willing to spend and sacrifice profit margin for market share gains and other potential competitive advantages.Walmart WMT -1.86% on Thursday reported a better-than-expected U.S. comparable sales gain of 3.4% in the quarter that ended October 31 and said it gained market share in categories including food, consumables and "many areas" of general merchandise. On a two-year stacked basis, those sales rose 6.1%, the first time in over 10 years that Walmart said it's seen such a scorecard. While higher store traffic, driven by demand for fresh food, and a higher average transaction amount contributed to the sales growth, e-commerce also played a critical role. Walmart's U.S. e-commerce sales surged 43%, contributing about 1.4 percentage points to last quarter’s results. But those gains have come at a cost. Walmart U.S.'s third-quarter gross margin rate narrowed, hurt primarily by its pricing strategy, higher transportation expenses and the increasing mix of e-commerce growth, the company said. Year to date, the company’s total capital spending has increased slightly to $7 billion while year-to-date operating income has declined 0.5% to $15.9 billion. As Walmart aggressively seeks to use its store fleet as a key weapon against Amazon.com AMZN -1.61%, results at its brick-and-mortar stores are increasingly intertwined with online sales. Walmart said Thursday that it has nearly 2,100 Walmart U.S. locations with grocery pickup services and is on track to offer same-day grocery delivery at approximately 800 stores by the end of the year. Posted by: Besoeker 2018-11-19 |
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