Walmart Competing with Amazon

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Blue Amazon glove faces Red Walmart Glove

Walmart Inc. [NYSE: WMT] categorised as the world’s largest retailer, forecasted not so great annual profit for this fiscal year.

This is attributable to decline in sales over that period.

According to Bloomberg, the company expects earnings per share of $4.75-$5.00 in comparison to Wall Street’s estimate of $5.13.

The continuous growth that Walmart has trended along is significant to the lifespan of the company and is important to maintaining its position in the industry.

Walmart Inc. has also gotten a push start from its acquisition of in 2016, which allowed online access. However, one of its biggest competitors Inc. [NASDAQ: AMZN] has branched off into different sectors such as healthcare. Moving into a brand new sector for Amazon Inc. is a positive move that broadens their scope and diversification.

This poses a problem for Walmart. Market share of the grocery and apparel industry has been a source of worry following a decline in online sales, while Amazon’s sales grew by almost 40 percent.

Doug McMillon, CEO at Walmart is trying his hardest to switch consumers’ interest from shopping in the store to buying online where they tend spend more. Other benefits from increasing foot traffic inside stores could help to motivate staff members and have further ripple effects such as increased wages and enhanced parental-leave policies.

Despite the fact that the investments mentioned earlier are suitable for any company, it can also dampen profits, which has been shown in the projections of this fiscal year.

Following a number of federal tax changes that happened last year under the Trump Administration, an analysis is still being done by the company to assess the impact. However, they have estimated about a $207 million benefit for their last quarter and entire financial year.

Online sales grew at about 23 percent during the last period, in comparison to the 50 percent in the previous quarter, which is not particularly encouraging. However, it is believed that and Walmart Inc. do well together.

With 2019 fiscal year approaching, the company sets positive outlooks and expect to expand their grocery business online. There also plans in the pipeline to upgrade their website which will focus more on fashion as well as home goods, and go into partnership with Lord & Taylor to sell some of their merchandise.

Walmart has already begun introducing new lines of apparel, which adds a brand new touch to their merchandising offerings.

Can Walmart maintain its position in the industry?

Will they keep up with Amazon?

We believe that the company has a strong brand and will continue to prove that to its stakeholders.

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