Milling & Baking News Corporate Profiles - 2019 - 112

COMPANY OVERVIEW

Walmart Inc.
Retailer captures share in physical and digital retail formats
roceries played a more prominent role
in Walmart Inc.'s performance in 2019.
During the second quarter of fiscal
2020, ended July 31, and the company's most
recent prior to publication, strength in food and
consumables underpinned U.S. results.
Walmart U.S. comparable sales, excluding
fuel, increased 2.8% in the quarter and more
than 7% on a two-year basis, representing the
segment's strongest growth in more than a decade, according to the company.
"Comp sales growth reflects strength in
grocery, including strong growth in private
brands," said Brent M. Biggs, chief financial officer. "We've been pleased with the consistently
strong performance in food and consumables
as the category had a mid-single digit comp
increase in the quarter and the best two-year
stacked comp in nearly 10 years. Comp ticket
was affected by slight deflation in food this
quarter while consumables' inflation increased
modestly."
More promising is Walmart U.S. e-commerce
sales increased 37% in the quarter, fueled by
strong growth in online grocery. The retailer
said it has surpassed 1,100 grocery delivery locations and has more than 2,700 pickup locations at its U.S. stores. The company's next-day

delivery service now covers about 75% of the
U.S. population.
"As we scaled grocery pickup in the U.S., it
unlocked new capabilities like grocery delivery,"
said C. Douglas McMillon, president and chief
executive officer of Walmart. "Customers love
these services, and we're rapidly expanding
them to new locations and testing new options
such as unlimited grocery delivery for a fee."
Walmart in October launched in-home delivery for over 1 million people in Pittsburgh, Kansas City, Mo., Kansas City, Kas., and Vero Beach,
Fla. The service delivers groceries and everyday
essential items directly in people's kitchen or garage refrigerators.
In February, Mr. McMillon was asked to describe what Walmart's "end goal" might look
like regarding online grocery pickup and delivery. He said 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," Mr. McMillon
said. "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."
Tasked with taking Walmart U.S. to the next level
is John Furner. He was named president and c.e.o.
of Walmart U.S. effective Nov. 1. Greg Foran, his
predecessor, has stepped down from the role, but
will stay with the retailer through Jan. 30, 2020.
Prior to his appointment, Mr. Furner was president and c.e.o. of Walmart's Sam's Club business
and earlier was chief merchandising officer for
Sam's Club. Before that, he was chief merchandising and marketing officer for Walmart China. CP

Chief executive officer -
C. Douglas McMillon

Walmart net income

Walmart total revenue

(fiscal years ended in January)

Walmart share price

per share
$124

$13,643

$9,862

$6,670

2017

2018

2019

112 \ November 2019

in millions

$113
$102

$485,873

$500,343

$514,405

2017

2018

2019

$91
$80
Oct.
2018

Dec.

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Milling & Baking News Corporate Profiles - 2019

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