(Photo by Jeff Zelevansky/Getty Images)
Remember Walmart?
It’s the ~$400B retailer seemingly left in the dust by a $1.9T behemoth called Amazon.
Turns out, things aren’t so bad
During its latest quarterly report, Walmart beat Wall Street expectations as “price sensitive grocery shoppers flocked to its stores amid rising costs for household staples,” per CNBC.
The Economist writes that a number of Harvard professors have been waxing lyrical about Walmart’s underrated prospects. The bullish signals come in 2 categories:
- Expanding customer base: Walmart is attracting a more upscale demographic with its Prime-like loyalty program (Walmart+), American Express partnership, and DoorDash-like delivery service (offered in 900 cities)
- Financials: Walmart is expanding its revenue streams by onboarding 3rd-party merchants into its distribution network and rolling out fintech solutions for customers (e.g. bill payment, crypto)
Don’t forget Walmart’s existing moat
Here’s a wild stat: 90% of Americans are within 10 miles of a Walmart and this availability will be increasingly valuable in a post-COVID world.
Walmart can’t sleep on its laurels, though. In 2018, Amazon passed it in distribution warehouse space and plans to build out another 140m square feet in coming years (more than Walmart has in the past 59 years).
Supply chain issues are a big test
But CNBC says Walmart is using its size to manage the obstacles by:
- Negotiating with manufacturers
- Bulking up its inventory
- Chartering its own ships to move goods across the globe
Despite tight labor markets, Walmart added 200k employees to its roster in the 3 months ended September 2021, per The Economist.
Tally it all up and the retailer is well-placed to handle the holiday season. Now, it just has to deal with the internet memes that come from the People of Walmart website.
