In the retail universe, there are retailers and then there is Walmart. Normal rules do not apply to this US colossus, whose annual revenues of over $500bn are roughly equal to those of the next four global retail groups combined. If Walmart was a country, it would be one of the world's 25 richest, with revenues higher than the GDP of nations including Belgium, Austria or the United Arab Emirates. With Walmart, all the numbers are big. The company is the world's largest non-governmental employer, with around 2.2m associates. At least another 4m people have jobs that depend directly upon purchases by the group. Yet the business is only a little over 50 years old, and virtually all its extraordinary growth in the US since the first Walmart store opened in 1962 has been generated organically, rather than as a result of acquisition. The US is home to some 4,760 outlets ranging from neighbourhood stores to hypermarkets, and the group also has a mammoth ecommerce operation, enhanced through the acquisition of Jet.com in 2016. It is the second largest online retailer in the US behind - some way behind - Amazon. The main Walmart stores division is partnered by Sam's Club, one of the two leading members-only warehouse clubs in the US (the other is CostCo). This is a mammoth business in its own right, with 600 outlets and around 46m members. But America is by no means the only market to experience the Walmart effect. The group is also a force in the international arena with 6,150 outlets in 26 other countries in Latin America, Europe and Asia. Not all Walmart's international ventures have been successful. Germany, South Korea and most recently Brazil are all important markets where the group tried unsuccessfully to establish a lasting presence. However, the UK - where Walmart operates as Asda - is the company's biggest international territory. China and Japan are important footholds in Asia, as is India, where the group acquired control of online retail giant Flipkart. In the Americas, it is a major force in Canada and Mexico, as well as in several mid-sized Latin markets including Chile and Argentina. It also has a controlling stake in South African retail conglomerate Massmart. Brands include Builders, Rhino, Game and the local arm of wholesale warehouse Makro. For the year to Jan 2020, group revenues hit a new high of $524.0bn while net income more than doubled to $15.2bn. The US accounted for 77% of sales, and international for the remaining $120bn. The business is still controlled by the family of founder Sam Walton, who own around 54% of equity between them. Their combined wealth was estimated at $156bn in 2019. Doug McMillon is CEO.
Capsule checked 1st May 2020
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Adbrands Daily Update 20th May 2020: No one who has stood in a supermarket line over the past two months, or seen exiting shoppers wheeling mountainous trolleys piled high with goods, will be surprised by the stellar numbers reported for Walmart for its first quarter of 2020. Because of its January (as opposed to December) year-end, the retail behemoth is one of the first to report figures for the quarter including peak pandemic season April. "Unprecedented demand across multiple categories led to strong top-line results," confirmed the group as US same-store comps jumped, while ecommerce including click and collect soared by 74%. That combined surge added almost $11bn to sales, lifting the three-month total to $134.6bn. In ecommerce, the strength of the Walmart.com business has prompted the closure of acquired secondary brand Jet.com, whose founder now leads the group's online business. The rise in international sales was lower (3%), partly as a result of currencies, and group profit growth was also slightly less spectacular - up 4% to $4.1bn - as a result of exceptional pandemic-related costs, including $755m of staff bonuses.
Adbrands Daily Update 27th Feb 2020: With Asda still stuck firmly in third place in UK groceries behind Tesco and Sainsbury, parent Walmart has begun to investigate the disposal of a majority stake in the business. "Following inbound interest," the company announced this week, "Walmart and Asda can confirm that we are currently considering whether there is an opportunity for a third party to invest in Asda, alongside Walmart, in order to support and accelerate the delivery of Asda's strategy and position Asda for long-term success." Another alternative would be floatation. "Walmart firmly believes that an IPO is an attractive long-term objective for Asda. Asda is a great business with a clear strategy for the future and Walmart is committed to ensuring it has the resources and support it needs to deliver that strategy." An attempt to merge Asda with Sainsbury was blocked last year by regulators.
Adbrands Daily Update 29th Jan 2020: "Famous Visitors". Walmart knocks it out of the ballpark - a mixed metaphor in this context but you get the idea - with a spectacular Super Bowl spot from Publicis Groupe's dedicated Department W agency. It's the same team who put together last year's 'Famous Cars' ad for the Golden Globes, but the stakes have been raised considerably. That's probably appropriate. This is Super Bowl, after all. Instead of just borrowing some iconic movie vehicles, Dept W have gone the whole hog with multiple character licenses, not just big names like 'Star Wars' and 'Star Trek' but also cult classics like 'Mars Attacks' and 'Bill & Ted' (though clearly there wasn't quite enough cash to persuade Keanu). The result is an absolute delight (especially for movie buffs). It gets our vote for most impressive Super Bowl entry so far.
Adbrands Daily Update 11th Oct 2019: Walmart made further changes to its US management team. Greg Foran, currently CEO of Walmart USA, is leaving the company to return to his home country as CEO of Air New Zealand. He will be replaced by John Furner, currently CEO of the group's wholesale warehouse business Sam's Club. Furner's successor will be announced in due course.
Adbrands Daily Update 21st Jun 2019: Walmart announced changes to its marketing team. SVP & CMO Barbara Messing is leaving the company and will be replaced on an interim basis by industry veteran Michael Francis, the one-time marketing chief of Target, JC Penney, DreamWorks Animation and others. Francis has been serving as a marketing consultant for Walmart. A fulltime CMO is being sought.
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