Online customers boost Walmart sales causing a 10% increase to share price
US retailer Walmart announced on 16 August that online sales had increased by 40% in the past three months, causing a massive 10% hike to the share price prior to the opening of the New York Stock Exchange. Walmart is the current owner of the UK’s Asda retailing brand, and said that total overall sales in the past three months had grown to $128bn, or £101bn.
Good News On Walmart’s Last Three Months
The President and Chief Executive of Walmart, Doug McMillion, commented: “We’re leveraging stores and e-commerce to make shopping faster and more convenient.”
Asda is currently a subsidiary of Walmart, but only reported a 0.4% rise in online sales. The Asda brand will soon be merging with the Sainsbury’s group, as announced earlier this year.
The small rise in online sales reported by Asda is much lower than the 3.4% increase reported for the first three months of 2018, although these statistics did include sales over the Easter period.
The CEO of Asda, Roger Burnley, said: “Our second quarter performance shows continued momentum for 2018 and this is the first quarter we have outperformed the market since 2014. We remain focused on innovation in our own brand, lowering prices and in continuously improving our shopping experience both in store and online.”
Walmart shares were traditionally performing very poorly on the Dow Jones prior to this massive sales hike and were down 13% over the year. Investors had expressed increasing concerns that shoppers were opting for online retailers like Amazon instead of traditional US supermarkets. This jump in online sales is the biggest sales hike the company has experienced over the past ten years.
Although these sales figures are promising, Walmart still reported losses of $861m over the period, which were caused by costs incurred during the sale of their 80% ownership of Brazilian retailers. The company is now focusing its attention on Asian markets.
Mr McMillion commented: “We’re continuing to aggressively roll out grocery pickup and delivery in the US and we recently announced expanded initiatives in China and Mexico.”
In other reassuring retail news announced on 16 August, the Office for National Statistics advised that total retail sales grew by 0.7% for the month of July, fuelled by aggressive discounting and possibly the summer heatwave.