As the boundaries between physical and online retail continue to blur, Walmart is positioned to capitalize, company executives noted during a Feb. 19 conference call with analysts.
In the United States, Walmart now offers grocery pickup at more than 2,100 locations and grocery delivery at nearly 800 locations, which represents about 69% and 36% of the population, respectively. Feedback from customers about these services has been positive, said C. Douglas McMillon, president and chief executive officer.
The added services benefitted Walmart during fiscal 2019, especially in the United States, where comparable sales growth of 3.6% exceeded expectations.
“We’re making progress in e-commerce,” McMillon says. “Our focus remains on earning repeat visits and strengthening our assortment of merchandise. We’re expanding our assortment, improving search, enhancing our web site and executing better on the fundamentals such as product reviews, inventory mirroring and on-time delivery to accomplish this. And of course, we remain committed to providing a superior value proposition as we compete aggressively on price across a broad spectrum of products.”
McMillon said sales in e-commerce in Walmart’s U.S. business increased 40% during fiscal 2019.
“We will continue to play offense and innovate as we shape the future of omni-retail,” he says. “This includes the expansion of innovative services like online grocery pickup and delivery.”
Asked by an analyst to describe what Walmart’s “end goal” might look like regarding online grocery pickup and delivery, McMillon says he envisions a scenario where the customer can pick depending on the occasion. Ideally, though, he said the company probably will try to figure out a way to drive a basket business that looks more like a dense route than a 1-hour or 30-minute race to deliver to a customer’s house.
“That may be different for restaurant delivery than it is for grocery delivery,” McMillon says. “It seems like those use cases are different enough. So we’ve got some tests going on and real-time learning here to try and do it in a way that customers want it to be done and create that optionality for them. And it’s kind of one more mix opportunity for us. We grew up managing merchandise mix and still do, and now we’re managing a service mix. And the good news is that once customers are in your ecosystem, they use you in some way. You get the opportunity to expand on that relationship, and that’s what we’re trying to do.”
Overall, net income at Walmart in the year ended Jan. 31 totaled $6,670 million, equal to $2.28 per share on the common stock, down 32% from $9,862 million, or $3.29 per share, in fiscal 2018. Revenues during fiscal 2019 totaled $514,405 million, up 2.8% from $500,343 million.