Walmart’s ecommerce business in the United States grew 97% in the company’s second fiscal quarter, ended July 31, the retail giant reported Tuesday morning.
That amounts to more than $10 billion in quarterly U.S. ecommerce sales, exceeding 11% of the retail giant’s overall U.S. net sales for the first time, according to GeekWire’s calculations, based on Walmart’s current and past financial results.
The new milestone reflects the ongoing shift toward online shopping amid the COVID-19 pandemic, and the increasingly fuzzy line between online and physical retail sales. It’s also an example of the pandemic accelerating the shift to digital commerce at traditional brick-and-mortar retailers.
“The tailwinds we’re experiencing are accelerating our progress to build a healthier eCommerce busines as we add new brands, improve product mix, grow the marketplace and achieve more fixed-cost leverage,” said Doug McMillon, the Walmart CEO, on a call with investors. “The stores and online merchant teams are now integrated, and we believe we’ll benefit from that change going forward.”
Not surprising, but confirmation that e-commerce as a share of total U.S. retail sales kicked up in 2Q.
Still uncertain whether our shopping habits return to "normal," or if we've permanently fast forwarded to a more e-commerce future. https://t.co/QbzzU0vrw4 pic.twitter.com/oxTqznnPSp
— Shira Ovide (@ShiraOvide) August 18, 2020
The trend reinforces the notion that Amazon and Walmart will increasingly compete head-to-head, with the Seattle tech giant expanding its physical retail footprint through Whole Foods and Amazon-branded stores, at the same time as Walmart moves further into ecommerce.
In addition, McMillon gave new details on the call about an upcoming revamp of Walmart’s membership program, reportedly dubbed Walmart+. It’s expected to cost $98/year, competing with Amazon’s $119/year Prime membership. Here’s what the Walmart CEO said.
“There’s been a lot of buzz recently about membership at Walmart. We’ve been testing membership with Delivery Unlimited subscriptions since late last year. That customer offer … was limited to a grocery and consumables delivery service as the reason to sign up. Since that launch, we’ve proven to ourselves that we can pick and deliver a broad set of categories across the Supercenter, not just food and consumables, but a wide assortment of general merchandise. We think that assortment, breadth and our ability to deliver with speed nationally, combined with a few other benefits for customers, will result in a compelling proposition.”
Walmart’s total revenue for the quarter, including international sales and Sam’s Club, was $137.7 billion, up 5.6%, with profits of $6.5 billion, or $2.29/share.
Amazon reported total net sales of $88.9 billion, up 40%, in its second quarter, ended June 30, with profits doubling to $5.2 billion. However, those results also include sales from its Amazon Web Services cloud division.
Digging deeper into the numbers, Amazon’s global online sales were $45.9 billion for the quarter, up nearly 50%, and its physical retail sales were $3.8 billion, down 13% from the same period a year ago.
Here is Walmart’s investor presentation, and a replay of its earnings call, below.
