Walmart really is a tale of two channels. Annual sales grew 1.9%, reaching $524 billion for the fiscal year 2020 as the company wrestled with the same overhead and profit challenges of many of its retail competitors. The good news is e-commerce sales rose substantially by 35% and the company website had its highest quarterly growth in traffic for the year.
CFO Brett Briggs acknowledged the company saw some soft sales in several merchandise categories in the US and several international markets in the fourth quarter. Business turmoil in Chile also negatively impacted results.
“We understand the factors that affected our results and are developing plans to address them. We remain confident in our business strategy and our ability to deliver value and convenience for our customers through an integrated omnichannel offering across the globe,” Briggs said.
Year-end 2020 highlights
In addition to total revenue growth, US sales grew 2.8% and US e-commerce grew 37% in 2020. Net sales internationally grew by 2.7% and were positive in Mexico, China, and India.
Among the other highlights operationally for the company during the year were numerous e-commerce additions as well as private label brands including:
- launch of free NextDay delivery for Walmart.com
- 3200 grocery pickup locations and 1600 delivery locations in the US
- launched Walmart InHome Delivery and Voice Order services
- announced autonomous vehicle delivery pilot program with Nuro
- introduced a wide range of new private label brands online in fashion, denim, kids fashions, home, baby, floral, health and wellness, online pet pharmacy
- enhanced wireless services online and in-store
- lunch same-day pickup at Sam’s Club stores
- opened a new intelligent Retail Lab in a live shopping environment to research the possibilities of Artificial Intelligence
- introduced Capital One Walmart Rewards credit card program offering 5% cashback at Walmart.com
- expanded grocery pickup and delivery in Canada through a partnership with Instacart
- announced plans for $1.2 billion investment to enhance logistics in China including a new delivery app and blockchain traceability
- enhanced a wide range of environmental, fair trade and educational programs supported by the company.
What’s ahead?
Walmart recently closed its Jetblack personal shopping and delivery service, test-launched in New York City but only gaining 1000 customers and never turning a profit. Clearly, it’s downmarket positioning did not lend itself to this type of concierge-type service. Lessons learned.
The company’s grocery and online grocery pickup and delivery services continue to show positive adoption and reception by consumers.
Overall, that’s an impressive amount of sales, revenue, and systems success for a multinational company with omnichannel ambitions built upon its retail platform and footprint in the US and abroad.
The e-commerce results are particularly impressive given the competition from Amazon and other savvy retailers like Target.
For fiscal 2021, the company predicts 3% growth in US sales, 4% internationally, and estimates 30% growth in its e-commerce business. Walmart expects to spend $11 billion with a focus on store remodels, customer initiatives, e-commerce, technology and supply chain improvements.
The company now operates 11,500 stores under 56 banners in 27 countries in addition to its e-commerce websites. With fiscal year 2020 revenue of $524 billion, Walmart employs over 2.2 million employees worldwide and the future looks positive in-store and online assuming no major impact from business disruptions in Chile and the impact of the coronavirus in China.
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