Wal-Mart grows global web sales 30% in 2013 and projects similar growth this year
February 20, 2014 10:58 AM
Wal-Mart Stores Inc., the world’s largest retailer by sales, increased its online sales by more than 30% in its last fiscal year to more than $10 billion and projects more than $13 billion in web sales this year, the company reported today.
Wal-Mart, already No. 4 in the 2013 Internet Retailer Top 500 Guide, could challenge for the No. 2 spot held by Staples Inc., which reported $10.3 billion in 2012 online sales. Apple Inc. is No. 3, and Amazon.com Inc. is No. 1 in the Top 500.
E-commerce was a bright spot in Wal-Mart’s fiscal fourth quarter, which ended Jan. 31, 2014. Store sales during the period were dampened by harsh weather last month and cutbacks in the U.S. government’s food stamp program that hurt grocery sales. Even with web sales contributing 30 basis points, or 0.3%, to U.S. comparable-store sales in the fiscal fourth quarter, Wal-Mart’s U.S. same-store sales declined 0.4%.
Web sales were also a highlight in Canada, where web sales grew 145% in the fourth quarter, the company said.
Online sales also boosted results for Sam’s Club, Wal-Mart’s warehouse store chain. E-commerce contributed .4% to fourth quarter comparable-store results, which declined 0.1% overall. “Year-long site improvements have strengthened conversion, particularly in mobile transactions,” said Sam’s Club president and CEO Rosalind Brewer, who did not expand on mobile results. Wal-Mart recently moved itsSam’s Club e-commerce team from its corporate headquarters in Arkansas to Silicon Valley in California, where the company’s global e-commerce organization is based. Wal-Mart now has some 2,000 employees in Silicon Valley.
Online sales are particularly strong in key international markets, company executives said. In China, where Wal-Mart owns 51% of web-only retailer Yihaodian, online sales grew by more than 100% last year, David Cheesewright, president and CEO of Walmart International said. In both China and Brazil, he added, Wal-Mart’s e-commerce growth was double the market rate. Yihaodian is No. 6 in Internet Retailer’s newly released 2014 China 500.
In the United Kingdom, where Wal-Mart owns supermarket chain Asda, online sales grew 18.7% last year. Cheesewright notes that Asda continues to expand its “click and collect” program that allows shoppers to order online and pick up in stores or at other locations. “We added 87 Click & Collect sites in the U.K., including six Underground station locations as part of an innovative collaboration with Transport for London,” London’s mass transit operator, Cheesewright said.
Company officials pledged to continue to invest in e-commerce, with a focus on four major markets: the United States, United Kingdom, China and Brazil.
All of Wal-Mart’s operating units strengthened their e-commerce platforms, leading to the 30% growth in annual e-commerce sales, said Doug McMillon, who took over as CEO of Wal-Mart Feb. 1 from Mike Duke. With a nod to global e-commerce chief Neil Ashe, McMillon said, “We know that technology is changing how customers around the world shop, and we are changing with them. Under Neil’s leadership and with company-wide support, we will continue to invest in this area that is critical to our success.”
For the fourth quarter, ended Jan. 31, 2014, Wal-Mart reported:
- Web sales contributed 0.3% to comparable-store growth in the U.S. The retailer did not break out growth for global e-commerce for the quarter.
- Global sales increased 1.4% to $128.8 billion. Wal-Mart U.S. sales grew 2.4%, but comparable-store sales, including e-commerce, declined 0.4%.
- Net income declined 20.9% to $4.65 billion
For fiscal 2014, which ended Jan. 31, 2014, Wal-Mart reported:
- Global e-commerce sales grew 30% to over $10 billion. Wal-Mart includes in e-commerce sales both sales ordered online and fulfilled by its e-commerce distribution centers and an estimate for orders placed online and fulfilled by stores.
- Global revenue increased 1.6% to $473.1 billion. U.S. sales grew 1.8% to $279.4 billion.
- Net income of $17.0 billion, down 6.0%.