As Walmart is conceding lower expected revenues this year, along with what appears to be a challenging holiday shopping season, it is moving to boost investment in E-Commerce and pull back from opening new physical stores.
Walmart has historically been aggressive with new store openings, but the market now has become less hospitality to that strategy, noted The New York Times. “Growth in sales in the United States, excluding new stores, has stalled for six consecutive quarters, hurt by slowing customer traffic and intense competition from both online retailers and smaller discounters like dollar stores,” the story said.
Walmart said Thursday (Oct. 16) that it will as much as $1.5 billion into E-Commerce and other digital efforts in FY 2016, which runs from Feb. 1, 2015, through Jan. 31, 2016. That’s up from $1 billion in FY 2015.
Walmart CFO Charles Holley said the world’s largest retailer needs to rethink its strategy.
“Our business and customers continue to evolve and so will the way we deploy capital,” said Holley, according to a report in Internet Retailer. “We will invest more heavily in e-commerce initiatives, while temporarily moderating our global physical growth, particularly larger stores. We are focused on creating an endless aisle and appealing to our customers’ changing needs.”
Holley also said Walmart expects to finish with the year with $12.5 billion in global e-commerce sales,” the Internet Retailer story said. “The company expects web sales to increase 25 percent in fiscal 2016, and growth from 2016 to 2018 to average 30 percent to 40 percent, Holley said. At the same time, Wal-Mart expects net sales growth to increase just 2 percent to 4 percent next year.”