The world's largest retailer on Thursday reported strong third-quarter sales, helped by its online grocery business, and raised its profit forecast for this year's holiday shopping season. Like other retailers, Walmart is benefiting from strong sales and rising customer satisfaction, with everything from children's toys and educational products to fresh food having their best performance in more than a decade.
Some retailers also benefited from the closing of Toys R Us and Bon-Ton stores, while the Sears bankruptcy will create more sales opportunities.
Walmart has been expanding by acquiring brands and adding merchandise online since it bought Jet.com two years ago, and it has also been adding delivery and pickup options for groceries. Currently, 2,100 of its 4,700 U.S. stores offer groceries, while nearly 600 locations offer grocery delivery. Walmart also revamped its website to focus on fashion and home goods.
Still, Walmart's online sales are only a fraction of Amazon's online global merchandise empire, with Walmart's online business in the United States at just $11.5 billion.
A visit to a Walmart store in Houston last week revealed a store with an abundance of holiday merchandise (like an expanded toy aisle, a giant interactive toy pony and a Barbie Dream Camper) that cost nearly $400 each. And the shoes are already unboxed and hanging on the shelves, making it easy for shoppers to find them.
Walmart U.S. CEO Greg Foran said in an exclusive interview and tour at a Houston store last week that they are optimistic about the quality of products, the flow of goods and prices compared to a year ago.
Walmart in Bentonville, Arkansas, has more promises. Under Foran, Walmart is creating a tech-powered shopping experience while transforming its stores into efficient distribution hubs that can fill online orders, reducing shipping costs and speeding up deliveries.
Walmart is deploying giant pickup stations that automatically deliver online orders at hundreds of its stores, and customers can now also better find items in stores. Staff equipped with the new app will also be able to manage daily tasks on their mobile devices, making online orders more convenient and faster for customers.
Foran acknowledged that it is facing stiff competition from Amazon and other traditional chains like Target. Bain & Co. predicts that by the end of this year, Amazon in the U.S. will overtake the market and capture half of all e-commerce sales.
