On-line orders pick up at night for Wal-Mart

by Jeff Gelski
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Wal-Mart grocery pickup station - online ordering
More Wal-Mart customers are ordering groceries on-line and picking them up in Wal-Mart parking lots.

BENTONVILLE, ARK. — Digital activity, even when the sun goes down, is rising for Wal-Mart Stores, Inc. People ordered more groceries on-line in the fiscal year ended Jan. 31, but deflation in meat and poultry had a negative impact on financial results for food.

Globally, overall e-commerce sales on a constant currency basis increased about 12% to $13.7 billion in the fiscal year. Wal-Mart expanded on-line grocery shopping to more than 150 locations across more than 20 U.S. markets, said Doug McMillon, president and chief executive officer of Bentonville-based Wal-Mart, in a Feb. 18 earnings call.

Doug McMillon, Walmart
Doug McMillon, president and c.e.o. of Wal-Mart

“Customers are ordering on-line and on their phones and then picking up their groceries on our parking lots without ever leaving their cars,” he said. “Customer satisfaction for those who use our free pickup service is in the high 90s.

“We are learning some interesting things along the way. We have found that 8 p.m. to 9 p.m. is one of the most popular times customers order groceries on-line, usually once the kids go to bed. We also see a healthy number of orders in the middle of the night. These may be parents comforting or feeding infants and ordering more diapers or formula to pick up the next day.”

Wal-Mart faced significant headwinds from deflation in meat and dairy products, which resulted in slight deflation across the entire food category, said Greg Foran, president and c.e.o. of Wal-Mart U.S. Food deflation has accelerated over the past six weeks and will remain a challenge, he said.

Comparable store sales in grocery were up low single-digit for Wal-Mart U.S. For Sam’s Club, comparable store sales were down low single-digit in both fresh/freezer/cooler and grocery and beverage.

Sam's Club store
For Sam’s Club, comparable store sales were down low single-digit in both fresh/freezer/cooler and grocery and beverage.

“Sam’s Club is in the early days with its new strategy,” Mr. McMillon said. “Comps for the (fourth) quarter were below what we anticipated, and food in particular underperformed outside of the holiday periods. We are pleased with the work so far to address the fundamentals of the business to improve merchandising and drive new membership, but we have more to do.”

Companywide, net income from contributing operations attributable to Wal-Mart was $14,694 million, or $4.58 per share on the common stock, in the fiscal year, which was a 9% decline from $16,182 million, or $5.01 per share, in the previous fiscal year. Total revenues of $482,130 million were down 0.7% from $485,651 million in the previous fiscal year.

In the fourth quarter, net income from contributing operations attributable to Wal-Mart was $4,574 million, or $1.44 per share, which was down 8% from $4,966 million, or $1.54 per share, in the same time period of the previous year. Fourth-quarter total revenues slipped 1.4% to $129,667 million from $131,565 million.
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