While overall Walmart’s fourth-quarter 2018 profits fell short of expectations and the company struggled with slower e-commerce sales, customer numbers rose and sales were better than expected.
Of note were Canadian operations which generated increased operating income, a 2.9 per cent rise in sales and a 1.4 per cent increase in traffic, also gaining market share in food, consumables and health and wellness.
· For the company as a whole, strong customer traffic generated a low-single-digit increase in grocery sales and a mid-single-digit increase in health and wellness. Walmart’s total revenue was $136.3 billion, up 4.1% ($5.3 billion).
· E-commerce sales rose 23 per cent during the fourth quarter from 50 per cent in the third quarter and Walmart struggled to manage online inventory. Despite e-commerce sales cooling, the company still finished the year with more than 40 per cent growth in online sales and expects that pace to continue.
Walmart continues to invest in its digital business and its stores as it faces a direct challenge from Amazon, particularly in online sales and home grocery delivery.
Indeed, a Reuters report notes Walmart has a long way to go to get even close to Amazon’s online dominance. Amazon has leveraged its $99-a-year Prime membership program into strong loyalty from customers. And Amazon’s $14 billion purchase of Whole Foods last summer coupled with the company’s recent announcement of a two-hour delivery from the grocery chain to is members, means Amazon is now competing more directly with Walmart.