Data Dive, Big Moves Edition: Walmart, Uber Eats And The US Stock Market

Whatever else gets written about 2020 in the history books, we suspect the adjective “boring” will not make the final cut. The first eight weeks of the first year of the 20s have certainly lived up to the billing and roared right along — with an awful lot of big action coming in from all corners.

Feeling a bit lost in the fast shuffle of news events? That’s OK, it’s what the weekly Data Dive is here for — to make sure nothing fall through the cracks information-wise. And this past week there were all kinds of interesting attractions. Walmart is consolidating its efforts — and apparently making a move to more directly challenge Amazon Prime. Uber Eats, facing losses and stiffening competition from both Grubhub and DoorDash, is changing its leadership and reorienting its efforts around profitability.

A reorientation that could prove to be a bit of a challenge, since the COVID-19 outbreak that is spreading around the world seems to have infected the stock market, sending shares crashing through the ground as Wall Street put in its worst performance since the dawn of the Great Recession.

Let’s dive in…

Walmart’s Many Resets

After an earnings performance that, despite showing growth across the board, was a disappointment to investors and analysts, Walmart is entering 2020 in redesign mode — particularly when it comes to digital operations. CEO Dough McMillon noted that while digital has performed strongly with food as its backbone (in the form on Walmart’s buy-online, pick-up curbside program), it needs to now expand and consolidate that strength across general merchandise categories.

Powering that plan, Walmart had two big announcements last week. The first was the news that the retailer is bringing together its store and eCommerce product-buying teams.

Manufacturers that sold items in Walmart’s physical locations and on Walmart.com had to pitch two distinct buying teams, and groups sometimes had discordant opinions over pricing differences between in-store and online products. That will now be replaced by category-focused product teams — focusing on areas like apparel, entertainment, food and consumables.

An executive will head up each team and eventually purchase each product Walmart sells in the U.S. The food and consumable groups will commence joint buying right away, and other purchasing categories will join forces as time goes on.

According to Walmart  the new structure is targeted at having steadier prices and customer experience regardless of where transactions occur.

That notably was one of two big pieces of news out of Walmart — though the second is a bit less well defined. The news broke this week that Walmart is looking to bring its own version of Amazon Prime to the market — likely to compete more efficiently head-to-head with the global eCommerce giant.

Over the last year and a half, Walmart has been exploring the option of a paid subscription model that would offer certain perks Amazon wouldn’t be able to match, and it looks like starting as early as this month consumers could see the program start rolling out. The news was first reported by Vox, and while a Walmart spokesperson confirmed the new initiative was called Walmart+, they didn’t offer any further details. According to reports, no fee amount has yet been set for the subscription service.

And of course the big question is how and if these moves will power up Walmart’s eCommerce game, which has been growing steadily over the last few years but not hitting the levels the retailer is seeking.

Speaking of need to hit a higher level …

Uber Eats Roster Change

Bested by competitors and having difficulty attaining profitability, Uber is apparently looking to do something different in its Uber Eats business as it seeks to effect a turnaround.

Pierre-Dimitri Gore-Coty, head of international rides at Uber, will be taking over leadership of Uber Eats. He replaces Jason Droege, though Droege will be “available until June to help with the transition” per the company.

In a statement on the incoming changes, Uber CEO Dara Khosrowshahi said, “As Eats moves into its next phase of more profitable growth, I am happy to have Pierre at the helm, and look forward to him applying his nearly eight years of experience with our Rides business to capture the many opportunities that lie ahead for Eats.”

In a tweet, Jason Droege said that he had “decided to step down” from his Eats role.

He continued, “I feel lucky to have been part of Eats, from the 1st order in Toronto in Dec ’15 to one of the world’s largest marketplaces. This success is a testament to the hard work of our team, and I’m honored to have played a part[.]”

Uber, Walmart and every other firm that is making plans for big change in the first half of this year, however, has an economic black swan to shoo from its path first. And getting through the COVID-19 virus — or coronavirus — crisis is getting more difficult by the day as the effects keep multiplying.

The COVID Crash

To say it was a rough week on Wall Street last week would be underselling things some. Over the course of five days of trading, the Dow lost 3,500 points by the end of the week, while the Dow, NASDAQ and S&P 500 all dropped by more than 10 percent, knocking them officially into correction territory. The S&P also had the dubious distinction of logging the biggest single-day losses it’s seen in its entire history — losing $1.7 trillion (with a “T”) last Tuesday.

“We are finally starting to see the markets react to the coronavirus,” Nicole Tanenbaum, chief investment strategist at Chequers Financial Management, told The Washington Post. “There has been a lot of complacency in the market and a sentiment-driven rally that hasn’t taken into account that this virus may not be as contained as we hoped it would be.”

So what happens now?

That remained the jump ball question as the markets opened today, with futures having been all over the map all weekend. White House economic advisor Larry Kudlow told CNBC that while the week on the market was a roller coaster, things will likely begin to normalize this week.

Industry, however, does not seem to quite match that confidence, as the COVID-19 virus is cutting a swath through global supply chains, travel, events, ridesharing in major metro areas and now the stock market.

So far leaders at Apple, Walmart, PayPal and Target have all more or less matched JPMorgan Chase CEO Jamie Dimon’s take — there are simply more unknowns than knowns in this situation.

“We’ll just have to wait and see,” he said.

And when what there is to see becomes visible, quantifiable and explainable — we’ll be here, with the Data Dive to take you all through it.

Have a good week.