Investors challenged to rethink Walmart business profile
Walmart, the global retail giant, has challenged investors to rethink their view of the company’s business as it strives to reinvent the retail experience through its research into technological advancements.
The era of dominance for big chain stores on the high street and out-of-town shopping parks is being challenged by internet-based companies such as Amazon and eBay for market share.
These relative newcomers to the retail market have lower costs as they don’t require expensive real estate in every major town and city, instead operating from large central warehouses – strategically placed for optimum delivery requirements.
Slower online growth
Walmart also lowered its earnings forecasts for the current financial year and said e-commerce growth next year would be slower than in the current year.
Yet investors were not overly disturbed by the news. Shares in Walmart climbed 2.1% on Tuesday and were up fractionally in pre-market trade on Wednesday.
Chief executive Doug McMillon’s speech at the annual investor presentation may have helped support the shares.
“I want to challenge your thinking about Walmart,” he said. “There is a change within the company that is related to mindset, culture behaviour, and we are inventing again.”
Indeed, the company had been among the foremost to research blockchain innovations in supply chain management and delivery options and currently has several blockchain patents awaiting approval.
McMillion highlighted some of these innovations in his speech, as well as investments in machine learning and biometrics.
While the company said it now expected 35% growth in its online business for the next financial year, down from 40% expected for the current year, Walmart said the slower rate would reflect growth was coming off a much bigger base.