Walmart sees e-commerce sales jump 74% in Q1 2021, discontinues Jet.com
Walmart-owned Sam’s Club also saw e-commerce sales grow by 40% in Q1 2021 compared to the same period last year.
Total sales for Walmart US grew 10% for Q1 2021 led by strong sales growth in food, consumables, health and wellness, and some general merchandise categories. Total company revenue for the quarter was $134.6bn, an increase of $10.7bn (+8.6%).
Despite strong performance in recent months, Walmart has withdrawn its full year guidance due to the volatility COVID-19 has caused.
“The decision to withdraw guidance reflects significant uncertainty around several key external variables and their potential impact on our business and the global economy, including: the duration and intensity of the COVID-19 health crisis globally, the length and impact of stay-at-home orders, the scale and duration of economic stimulus, employment trends and consumer confidence,” said Brett Biggs, Walmart Inc. chief financial officer.
“Our business fundamentals are strong, and our financial position is excellent. Customers trust us to deliver on our brand promise, and I’m confident in our ability to perform well in most any environment. While the short-term environment will be challenging, we’re positioned well for long-term success in an increasingly omni world.”
Strong growth in e-commerce
Over the past several weeks, Walmart has added to its online capabilities including the launch of express 2-hour delivery in the US, expanded slot capacity for existing pickup and delivery services, and an expanded temporary ship from store option at 2,500 store locations for orders placed on Walmart.com and through its mobile app.
Due to continued strength of the Walmart.com brand, the company announced it will discontinue Jet.com, the e-commerce site the retailer acquired nearly four years ago to accelerate its omnichannel strategy.
“Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future,” stated Walmart president and CEO, Doug McMillon.
COVID-19 has accelerated the food e-commerce adoption curve
Recent data from Brick Meets Click showed a strong surge in household penetration of retailer online delivery and pickup services.
In August 2019, the household penetration rate for home delivery or store pickup within the last 30 days was 12.5%, accounting for 16.1 million households. Fast forward to March 2020, when 19 states were under some state-level stay-at-home order, and penetration jumped to almost 40%, representing almost 40 million households and has stayed consistent in April.
While a gradual shift back to in-store shopping will likely occur in the coming months as some shoppers’ fears of coronavirus fade, Brick Meets Click anticipates a sustained consumer interest in online grocery shopping.
Over two-thirds (67%) of the households that have a high level of concern of contracting coronavirus will continue to use online delivery/pickup in the next 90 days, according to data provided by Brick Meets Click.
“We would anticipate that across all groups, but more importantly the lower-income segments, a growing interest in use of pickup, which in a way is going to be a second surge for retailers that have already increased capacity because we would expect even more demand to shift from delivery to pickup in the coming months,” said David Bishop, partner at Brick Meets Click, in a webinar last week.
