Walmart has become lifeline with spread of virus

Online sales in the U.S. jumped 74%, fuelled by a rush on crucial supplies

NEW YORK— Walmart became a lifeline to millions of people as the coronavirus spread and its surging profit and sales during the fiscal first quarter topped almost all expectations.

Online sales in the U.S. jumped 74 per cent, fuelled by a rush on canned foods, paper towels and other crucial supplies needed as people sheltered in place. Same-store sales rose 10 per cent at U.S. Walmart stores on strong sales of food, health and wellness goods.

Costs soared as well, $900 million (U.S.) in all related to the pandemic.

Cash bonuses issued to all hourly workers reached $755 million and Walmart upped pay by $2 per hour at its warehouses. It rolled out an emergency leave policy and spent money on shields at checkout lines, as well as new signage to control the flow of customers in stores.

Walmart pulled its guidance for the year, citing the chaos of the pandemic. It also pulled the plug on Jet.com, an online startup that it bought for more than $3 billion in 2016 as it sought to ramp up online operations to compete with Amazon.com. Walmart, Home Depot and

Kohl’s on Tuesday became the first major retailers to report the full impact of COVID-19 on financial operations and revealed the vast disparity between those allowed to keep their doors open during the outbreak and those that were not.

Home Depot, another critical supply line for those sheltering at home, reported strong sales and $850 million in additional costs related to COVID-19, mostly to compensate its workers.

Kohl’s, with it stores closed, swung to a $541million loss and revenue tumbled more than 40 per cent. J.Crew, J.C. Penney and Stage Stores have also remained closed. Already in a weakened state before the pandemic, all three sought Chapter 11 bankruptcy protection this month. Target and Macy’s will release their financial results this week as well.

There was already a broadening gap between big box stores and mall-based chains that had struggled follow customers online. The crisis has accelerated that trend, increasing the dominance of big box players while pushing clothing chains further into peril.

Even when the virus loosens its grip, industry analysts are unsure of what the post-pandemic response will be from consumers when it comes to fitting rooms or even walking into stores.