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Industry NewsWalmart lowers forecast, e-commerce growth still strong though slowing

Walmart lowers forecast, e-commerce growth still strong though slowing


At its annual investor meeting earlier this week, Walmart warned investors its earnings for the 2019 fiscal year, which ends in January, will be lower than expected.

CEO Doug McMillon also said Walmart expects to see slower growth in e-commerce for the 2020 fiscal year, despite a website redesign, increased grocery offerings and the acquisition of fashion brands. Growth is projected to be 35 per cent for FY 2020, compared with the 40 per cent expected this year. Analysts don’t expect the decline to be an issue given the huge scale of Walmart’s operations. E-commerce sales  growth is still well ahead of brick-and-mortar sales growth, and Walmart is keeping new store openings to a minimum.

McMillon said the business is going through a ‘rethink,’ investing in various technologies to grow its online business while it continues to face a strong challenge from Amazon for market share.

“I want to challenge your thinking about Walmart,” McMillon said, as reported by Reuters. “We are getting to reimagine retail and our business… expect us to test a lot and fail a lot.”

According to Reuters, McMillon highlighted Walmart’s patents in last-mile delivery systems, biometrics and augmented reality, investments in machine learning in areas like merchandising, and the use of blockchain security technology to improve food safety and traceability. He also cited the addition of in-store pickup towers to support online sales, and Walmart’s various e-commerce delivery options.

Walmart’s acquisition and integration activity has added to the company’s costs. Its $16 billion purchase of Indian e-commerce firm Flipkart in May is expected to keep earnings in the single-digit percentage range.

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