Wal-Mart’s e-commerce sales grow 21% in Q3

November 13, 2014 10:20 AM

Wal-Mart Stores Inc. reported today a 21% increase in online sales in its fiscal third quarter that ended Oct. 31, and said starting tomorrow store managers would be authorized to match prices on and other retail sites.

"About half of the stores were doing it anyway,” Greg Foran, president and CEO of Walmart U.S., told analysts on a conference call today. Wal-Mart will formalize the policy as of tomorrow, Nov. 14, making it part of its ad-match promise that guarantees it will meet the prices in print advertisements of local bricks-and-mortar competitors.

Wal-Mart executives also pledged additional investment in online assortments, direct-to-consumer fulfillment centers and tying its web sites more closely with its stores.

“Our customers want to be able to buy just about anything from us, so we’re expanding our e-commerce assortment to give them that opportunity,” Doug McMillon, president and CEO, said today in discussing the Q3 results. “We’re developing the capabilities to save our customers time and give them the choices they want by integrating digital and physical retail in ways that are convenient for what they want at that moment.”

While disclosing a 21% increase in global e-commerce sales, Wal-Mart did not provide a dollar figure for those sales, or break out U.S. web sales. However, company officials said contributed 20 basis points of the 500-basis-point comparable-store growth in Wal-Mart’s U.S. sales, which totaled $70.025 billion. The web also contributed 20 basis points of the 400-basis-point comp-store growth for the company’s Sam’s Club warehouse store unit, whose Q3 sales totaled $14.4 billion. is No. 4 in the Internet Retailer 2014 Top 500 Guide, with worldwide web sales of $10.03 billion in 2013, Internet Retailer estimates. The world’s largest retailer previously had reported global e-commerce growth of 24% in its fiscal second quarter compared to the year-earlier period, and of 27% in the first quarter. Wal-Mart reduced its projection for full-year online growth from 30% to 25% in August.

Rosalind Brewer, president and CEO of the Sam’s Club warehouse store unit, reported today double-digit growth both in online sales delivered to consumers’ homes and orders picked up in stores. She noted that Sam’s Club in October rebranded its in-store pickup program from Click ‘n’ Pull to Club Pickup.

“It’s a service that our business members have always loved, and now we’re expanding it to appeal to all members,” she said. “From the online Easy Reorder tool to new check-in kiosks at all clubs, members can complete a trip to Sam’s Club in a matter of minutes.” now features an Easy Reorder tab in the top navigation bar, set apart from other tabs by being in red type instead of blue. Shoppers sign into their accounts and then can reorder items previously purchased.

McMillon also noted that Wal-Mart was continuing construction of new fulfillment centers in the United States and Brazil. The retailer disclosed plans last month to build two new distribution centers in Pennsylvania and Georgia, each covering 1 million square feet. Earlier in the year, the company reported on plans to build an e-commerce fulfillment center in Indiana. Wal-Mart operates “dozens” of e-commerce fulfillment centers in the United States, a spokesman says, without specifying an exact number.

He notes the retailer has announced plans to build five large online fulfillment facilities in the U.S. in the past year: two in Pennsylvania and one each in Texas, Georgia and Indiana. In addition, the retailer has been steadily increasing its assortment, and this year offers 7 million SKUs on, 1 million more than last year, the spokesman says.

Wal-Mart operates localized e-commerce sites in 10 countries besides the United States. They are: the United Kingdom, China, Brazil, Canada, Japan, Mexico, Argentina, Chile, South Africa and India.

Dave Cheesewright, president and CEO of Walmart International, provided the following highlights of the retailer’s e-commerce activities around the world:

  • E-commerce sales were up 20% in the third quarter in the United Kingdom, as Wal-Mart added 148 new locations where shoppers can pick up online orders, including six in subway stations. Online grocery sales increased 18.6% year over year.
  • Yihaodian, the Chinese online retailer that is 51% owned by Wal-Mart “had strong sales growth,” Cheesewright said, though he did not provide details. “Traffic increased more than 40% and average ticket improved as well,” he said. He said the e-retailer’s annual Anniversary Sales event in July generated a sales increase of more than 50% over the prior year. Yihaodian is No. 6 in the Internet Retailer China 500, which ranks the leading retailers by online sales in China.
  • E-commerce sales were strong in Brazil, thanks to closer partnerships with supplies such as Sony and Electrolux, he said. “The August Black-Out Event, a Black Friday-like promotional event, was a great success. The event was more than twice as large as last year, with six TVs, seven mobile phones and one Xbox 360 sold every minute,” he said.

Online sales grew 66% in Mexico, “albeit off a small base,” Cheesewright said, without disclosing Wal-Mart’s web sales in Mexico. A new online grocery delivery option in Mexico City offers 30,000 items in 14 categories. He also noted that more than 20% of general merchandise sales were conducted through 150 kiosks at Wal-Mart stores, “giving customers who feel more confident ordering and paying in stores an attractive alternative to paying online.”

While Wal-Mart does not report e-commerce sales in dollars each quarter, the company reported the following for its fiscal third quarter ended Oct. 31:

  • Net sales increased 2.8% to $118.076 billion from $114.876 billion a year earlier.
  • Total revenue, which also includes membership fees and other income, increased 2.9% to $119.001 billion from $115.688 billion.
  • Net income was $3.826 billion, down 1.5% from $3.885 billion.

For the first nine months of the retailer’s 2015 fiscal year, Wal-Mart reported:

  • Net sales increased 2.1% to $351.579 billion from $344.290 billion in the same nine-month period a year earlier.
  • Total revenue, which also includes membership fees and other income, increased 2.2% to $354.086 billion from $346.588 billion.
  • Net income was $11.911 billion, down 1.1% from $12.045 billion.



Top Solution Providers