During the coronavirus pandemic, people came to Walmart for everything from groceries to bicycles, and e-commerce and store sales both climbed dramatically in the first quarter, according to Walmart. Tuesday afternoon, the company’s stock was down approximately 1%. Customers’ long stays at home and precautions amid the public health crisis, according to the big-box store, shifted shopping patterns. Shoppers made fewer trips to the store, bought more things, and prioritized essentials like toilet paper and pasta sauce above discretionary items like clothing.
In the first quarter, Walmart’s e-commerce sales in the United States increased by 74%, while same-store sales increased by 10%. According to Chief Financial Officer Brett Biggs, the company’s average ticket grew by 16 percent during the quarter, while transactions decreased by roughly 6%. Customers have swept some items from shelves, such as paper towels and surface cleaners, while skipping over others, according to Walmart CEO Doug McMillon.
During the epidemic, Walmart’s costs rose in tandem with their sales. Walmart employed almost 200,000 people to help clean stores, stock shelves, and complete online purchases in order to meet demand. Covid-19 cost Biggs almost $900 million in expenses, according to Biggs. Employee bonuses and enhanced perks accounted for around three-quarters of the total, he claimed. Employees have received two rounds of exceptional bonuses, and first-quarter payouts have been accelerated.
McMillon outlined three main aspects of the quarter on a teleconference with analysts on Tuesday. Initially, he said that people stocked up on groceries and other necessities. Later, he stated that they purchased puzzles, video games, and bicycles to keep them occupied, as well as office and workout equipment to assist them with their new routine at home and décor to beautify their living spaces. The shop observed an increase in spending at the conclusion of the quarter when customers received stimulus checks and purchased more discretionary products like clothing, televisions, and toys.
“Not only have hand sanitizer, disinfection wipes and sprays, toilet paper, beef, and pork been difficult to come by, but commodities like laptops, office chairs, and fabric have been cleared out in some of our stores and online,” he said. “As we enter the second quarter, we’re aiming to reclaim our in-stock position.”
Walmart, like many other corporations, has lowered its financial projection despite exceeding Wall Street’s projections. According to Biggs, the virus has caused the economy to experience “record variability.” Many factors, like the length of the Covid-19 situation, the amount of economic stimulus, and customer confidence, he said, might influence the company’s sales.
The business also announced that the Jet.com brand will be phased out. Walmart paid $3.3 billion for the e-commerce startup in 2016 to accelerate its e-commerce plan and better position the brick-and-mortar behemoth to compete with Amazon. Walmart obtained a team of online experts with the acquisition, led by Marc Lore, the founder of Jet.com and now CEO of Walmart U.S. eCommerce. The business hasn’t ruled out utilizing the brand name in the future, according to McMillon, but the Walmart name “resonates regardless of income, geography, or age.”
