Walmart on the defensive | Arkansas Blog

Monday, October 19, 2015

Walmart on the defensive

Posted By on Mon, Oct 19, 2015 at 7:48 AM

A DROP: Walmart stock's recent plunge was the biggest one-day loss in 17 yes.
  • A DROP: Walmart stock's recent plunge was the biggest one-day loss in 17 yes.

The New York Times dives into the problems
besetting Arkansas-based Walmart and its new CEO Douglas McMillon after a stock price tumble. It still has a balance sheet bigger than Norway's, but:

Membership-only warehouse clubs like Costco and hard discounters like Aldi are eating away at Walmart’s price-competitive edge. Hectic lifestyles are driving shoppers to smaller and more convenient dollar stores — even pharmacies — for groceries. Amazon and its vast online catalog, and the advent of seemingly every product imaginable at shoppers’ fingertips, is neutralizing the advantage of Walmart’s supercenter-size assortment.

But despite declaring a decade and a half ago, in 1999, that it was determined to take on the web, Walmart has stumbled in its attempts to dominate online as it had brick-and-mortar. In the company’s critical early days online, its insular culture helped drive away a celebrated e-commerce guru. It has been slow to roll out an online grocery store.

All the while, Amazon, armed with algorithms and warehouse robots, has steamrollered the competition online. Walmart’s online sales came to just a sixth of Amazon’s last year. Walmart.com is set to offer 10 million products by the end of the year. That is impressive, until you consider that a shopper will find an estimated 300 million items for sale on Amazon.com. In July, the e-commerce giant surged past Walmart in market capitalization, making headlines as the world’s new most-valuable retailer.

Note that organized labor doesn't buy that Walmart's recent stock troubles can be linked to $1 billion in wage increases, meant to spur its workforce. That's a small percentage of almost $500 billion in sales, after all. CEO Douglas McMillon made $19.4 million, but that was a drop from the year before.

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