Walmart said yesterday that its Q2 sales were up 5.6 percent to $137.7 billion, and that e-commerce sales were up 97 percent compared to the same period a year ago.
US same-store sales for the quarter were up 9.3 percent. The company said that same-store sales increases were not as strong during July as in the previous two months because shoppers already had spent their government stimulus checks.
Net income was $6.48 billion, compared with $3.61 billion a year ago.
From the Wall Street Journal:
"It marks the second consecutive quarter of strong growth and evidence that the world’s largest retailer is grabbing market share in some categories as many retailers close stores or declare bankruptcy amid coronavirus struggles."
From the New York Times coverage:
"Walmart’s strong results reflect how a few large retailers have been able to capitalize on the surge in demand for food and necessary items by Americans hunkered down at home. Walmart’s success, while many other retailers have struggled or failed in recent months, shows the consolidation in the retail industry has been compounded by the pandemic.
"The company noted that stimulus money helped boost sales of general merchandise, making it uncertain if Walmart and other large retailers will be able to keep up the sales growth in the coming months if policymakers do not restore the benefits that expired at the end of July."
"Walmart CEO Doug McMillon said the company benefited from Americans buying groceries, looking for ways to stay entertained during the pandemic and spending money on their homes. Some of those dollars came from government stimulus.
"Yet the company did not provide a financial outlook for the rest of the year. In an interview with CNBC, Walmart Chief Financial Officer Brett Biggs pointed to government stimulus as a factor that’s creating uncertainty during the public health crisis."
"Long after the spring spike of pandemic-related pantry loading and panic buying, Walmart Inc. is still benefiting from all the ways Covid-19 has reshaped consumer needs and spending patterns. And yet, even as the mega-retailer unveiled another strong quarterly performance, the underpinnings of its results should serve as a wake-up call to Washington: More government stimulus is urgently needed because it was crucial to keeping consumers off the sidelines this summer."
In other Walmart news yesterday…
• CEO Doug McMillon said that the company still plans to launch its Walmart+ program in the near future, but did not provide a launch date. McMillon said the program will be designed to ramp up the service element available to subscribers and give the company valuable shopper data.
It is believed that a Walmart+ membership will carry a $98 annual fee, and will offer perks such as same-day delivery of groceries and fuel discounts.
Walmart+ is being broadly positioned as making the retailer more competitive with Amazon Prime.
• Forbes reports that "Walmart chief executive officer Doug McMillon said Tuesday the retail giant remains committed to its rollout of Walmart Health brand centers to expand low cost healthcare services to tens of thousands of its U.S. customers.
"Comments by McMillon and the head of Walmart’s U.S. operation came after the surprising departure earlier this month of Sean Slovenski who had been Walmart’s senior vice president of health and wellness for the last two years overseeing the launch of what he called 'super centers' for healthcare services."
- KC's View:
To me, the e-commerce numbers from Walmart (and Target, reported below) point to a shift in consumer behavior that never will return to previous levels - these are vivid examples of how the sector has accelerated by three or four years.
That doesn't mean there won't be a little backsliding as/if we come out of the pandemic. Of course there will be. But consumers are getting used to the idea of ordering online and opting for either pick-up or delivery … especially when it comes to non-differentiated product categories where going to the store simply doesn't add to the experience.
As for Walmart+ … it will be interesting to see if some of its customers - those who can't or won't spend the extra $98 a year to be part of the club - feel slighted by the program's existence, or think that they are being bifurcated out of Walmart's preferred customer list.
In some ways, that's exactly what is happening. It is what Amazon does … but Amazon built it into the business model from relatively early days. Walmart is challenging a status quo that has existed for a long time. I give them credit for doing so, but I don't think it is a slam-dunk that it will work.