Walmart gaining ground on Amazon

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This article was published 17/11/2017 (2915 days ago), so information in it may no longer be current.

The showdown between Walmart and Amazon is heating up — just in time for the holidays.

Walmart, which has worked hard to shed its image as an old-school retailer, on Thursday offered proof that its efforts are working — online sales rose 50 per cent, the company said, as more Americans flocked to Walmart.com for everyday items.

Shares of Walmart’s stock rose nearly nine per cent to an all-time high following the announcement.

“Walmart is firmly on the advance, both in its home market and elsewhere,” said Neil Saunders, managing director of GlobalData Retail. “From our data, it is clear that Walmart is not only getting existing customers to spend more online, but is also attracting new shoppers.”

The online sales growth bodes well for Walmart as it enters the critical holiday shopping season. The retailer — which last year had US$486 billion in revenue, more than three times Amazon.com’s US$136 billion — has spent the past year aggressively expanding its online reach. It has spent billions buying up e-commerce sites such asJet.com, ModCloth and Bonobos, and has invested heavily in online grocery and same-day delivery programs.

Walmart — which tends to have sprawling stores in the outskirts of towns — is also making an effort to move into urban markets. Last month, the company bought courier service Parcel as part of an effort to provide same-day deliveries in New York. Its US$3.3-billion acquisition of Jet.com last year was also a move in that direction, as it looks to win over affluent, urban shoppers from rival Amazon.

It has also beefed up its website. Walmart.com now offers 70 million items, more than three times what it did a year ago, and carries high-end brands such as KitchenAid and Bose. Earlier this week, the company announced it would also begin selling items from Lord & Taylor, the upscale department store chain, on Walmart.com.

“Our goal is to create a premium fashion destination on Walmart.com,” Denise Incandela, head of fashion for Walmart U.S. eCommerce, said at the time. “We see customers on our site searching for higher-end items, and we are expanding our business online to focus on adding specialized and premium shopping experiences.”

The earnings release comes as Walmart prepares to double-down on online and in-store discounts ahead of Black Friday. The company began offering holiday discounts two weeks ago, with US$1 flashlights and US$245 laptops, and will offer “doorbuster” deals online beginning at 12:01 a.m. on Thanksgiving day in the U.S.

Stores will open at 6 p.m. on Thanksgiving.

Analysts predict a fierce competition among retailers and say a handful of companies, including Amazon and Walmart, are likely to battle over customers. A recent survey by accounting firm BDO finds that more than one-quarter of Americans plan to do most of their holiday shopping on Amazon.com this year.

“There is definitely money to be spent this season, and both Walmart and Amazon are likely to pull customers from other competitors,” Saunders said. “Both have become destinations for a lot of shoppers.”

At Walmart, revenue went up by 4.2 per cent to US$123.18 billion in the most recent quarter. Sales at U.S. stores open at least a year climbed 2.7 per cent from a year earlier, which executives attributed to growth in grocery sales.

“The food business, in particular, has accelerated with our fresh meat, bakery and produce teams leading the way,” Doug McMillon, chief executive of Walmart, said in a Thursday morning call with analysts. “We have momentum.”

— Washington Post