Walmart flexes muscles against Amazon with grocery and other online services
NEW YORK Walmart, armed with grocery and other online services, is proving it can do battle with Amazon.
The world’s largest retailer delivered strong third-quarter results Thursday, extending a streak of sales growth into its 11th straight quarter that showed it’s pulling shoppers online and in the store. It also raised profit expectations for the year heading into the holiday shopping season.
Like other retailers, Walmart is benefiting from a strong job market and rising consumer confidence. Home Depot and Macy ’s raised annual profit expectations this week. But they are also benefiting from the misfortunes of others. Toys R Us and Bon-Ton Stores have gone out of business, while the bankruptcy of Sears Holdings Corp. is creating more opportunities to grab sales. J.C. Penney is still floundering, with shares falling after it withdrew profit guidance and lowered its sales expectations for the year.
Walmart sales were strong in such areas as fall seasonal goods, toys and fresh food. That helped sales at stores open at least a year rise 3.4 per cent, a bit slower from the previous quarter’s 4.5 per cent at Walmart’s U.S. division, which marked its best performance in more than a decade. The measure, an indicator of a retailer’s health, was helped by a 1.2-per-cent increase in customer traffic and a 2.2-per-cent bump in transactions.
Since buying Jet.com for more than US$3 billion two years ago, Walmart has been expanding its online business by acquiring brands and adding thousands of items. It’s also been ramping up grocery delivery and pickup options. Grocery pickup is now offered at nearly 2,100 of its 4,700 U.S. stores, while grocery delivery is available in nearly 600 locations. Walmart has also revamped its website with a focus on fashion and home furnishings. That all helped to drive a 43-per-cent increase in online sales in the U.S. during the latest quarter. That was up from a 40-per-cent increase the second quarter period and a 33-per-cent increase in the first quarter.
“We’re feeling confident going into this holiday season,” said Walmart U.S. CEO Greg Foran. “I think the standards, the flow of merchandise, our pricing are feeling better than it was a year ago.”
Walmart, based in Bentonville, Ark., is creating a tech-powered experience at its stores, while transforming them into efficient distribution hubs that can fill online orders to reduce shipping costs and speed up deliveries.