Walmart e-commerce sales grow more than 70% in Q1
Walmart’s first-quarter earnings report and webcast confirmed many of the trends discussed since the start of the pandemic, including the surge of interest in online grocery.
The company’s e-commerce sales for the quarter were 74% higher than the same period in 2019, and a news release mentioned “strong results” for grocery pickup and delivery services.
“Our increasingly seamless omnichannel customer proposition is resonating,” Doug McMillon, president and CEO of Walmart, said on the earnings webcast. “This strategy positions the company well during the crisis, and we remain convinced that it will in the future. Before this crisis, we were already seeing robust adoption of online pickup and delivery.
“As this crisis created a need for social distancing and required people to stay home, customers embraced pickup and delivery even more,” McMillon said. “Pickup and delivery are attracting greater numbers of new customers. The number of new customers trying pickup and delivery has increased 4X since mid-March.”
McMillon noted that perhaps Walmart should stop calling its online grocery service by that name because the retailer has so expanded the assortment available through the service. In the same vein, Walmart is discontinuing its Walmart Grocery app, instead providing the same services through the broader Walmart app.
The company recently launched an Express Delivery option, which features delivery in two hours or less, that is expected to be available from about 2,000 stores by the end of June.
Over the span of the COVID-19 crisis, Walmart has seen waves of unusual buying patterns — first with paper goods and sanitation supplies, then with education and entertainment products for kids at home, then with sewing machines and fabric for homemade masks, then with discretionary items as stimulus checks came in.
The big prevailing trend, like those others, is similar to what retailers across the U.S. have reported.
“During the quarter we saw customers consolidate shopping trips and purchase larger baskets in stores, which drove a ticket increase of about 16% while transactions decreased about 6%,” Brett Biggs, executive vice president and chief financial officer of Walmart, said on the webcast.
The retailer’s Q1 comparable-store sales grew 10%, with $134.6 billion in total revenue, but the company also incurred nearly $900 million in incremental costs related to COVID-19, according to the release. Biggs also noted on the webcast that margins are lower than normal due to the shift in product mix and shift toward e-commerce.
