Planet Retail: Results Paint Mixed Picture for Wal-Mart

There has been lots of buzz and comment over Wal-Mart Stores’ fourth quarter fiscal results. While the chain’s U.S. sales are rebounding, its quarterly profit and sales fell short of Wall Street expectations and its forecasts suggest that results in this quarter and fiscal year may again disappoint analysts.

Here are some interesting comments from Natalie Berg, global research director, Planet Retail, on the chain’s results:

“Today’s results paint a mixed picture. In the United States, Walmart is finally gaining traction by focusing on its core customers. Initiatives such as layaway and price guarantees have struck a chord with hard-pressed shoppers, while ongoing improvements in merchandising and availability have also helped to restore confidence. Walmart learned the hard way that it cannot veer too far from its core. Low prices and a wide assortment of brands are integral to its success.

That said, the key challenge for Walmart going forward will be maintaining this concept in the face of the ever-growing online threat. Walmart has been scrambling to make up lost ground in this area, and crucially now has a leadership team in place with the relevant experience to drive this forward. Walmart has been planting big boxes for the past 50 years but, like its global peers Tesco and Carrefour, is struggling to maintain its relevance in today’s digital world.

Going forward, Walmart’s brick-and-mortar strategy must become much more event-driven and supported with exclusive ranges to avoid direct price comparisons. While we maintain that Amazon poses the biggest threat, Walmart has the opportunity to leverage its physical store base. More needs to be done to create a seamless shopping experience across all channels.”


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