Robert Blews, 24 October 2019



With global revenues in excess of US$500bn, Walmart (WMT) is the largest retailer in the world. As a leader in both price and convenience, the company’s mission statement is to help people around the world save money and live better.

Leader in price and convenience

WMT’s strategy has always been to lead on price, and company’s everyday low prices (EDLP) offering is underpinned by its best in class procurement capabilities, as well as its importance to suppliers. To put the company’s purchasing power and scale into perspective, each week WMT serves approximately 270 million customers who visit the company’s more than 11,700 stores and numerous ecommerce websites under 65 banners in 28 countries. In addition to low price leadership, the second critical differentiator for WMT relative to its competition is the unparalleled convenience of its customer offering. Approximately 90% of the US population lives within 10 miles of a WMT store and many stores are open twenty-four hours a day / seven days a week.

Groceries are important

Grocery is an underappreciated but critical component to WMT’s competitive positioning and attractiveness to consumers. The US is WMT’s largest market at 76% of total sales. Within the US, Grocery (56%) and Health & Wellness (11%) account for 67% of WMT’s sales. Grocery is a critical offering for WMT because of the regular traffic it creates through its physical store base. As with merchandise, WMT’s strategy is to lead on price while offering convenient access to a broad assortment of items. Walmart is the leader in the “click and collect” grocery pickup and delivery, categories which are increasingly gaining traction growing proportion of US consumers stretched for both time and money.

Strategy - invest to become a leader in omni-channel retailing

Successful omni-channel retailers offer both physical retail stores and ecommerce offerings. The ultimate goal of an omni-channel strategy is to improve convenience by allowing customers to interact with the retailer in whatever way best suits their lifestyle. Importantly, there is a blurring between these traditionally separate channels and successful retailers are creating hybrid offerings that provide increased convenience for customers. Over the past several years, WMT has prioritised investment in information technology, distribution, and digital technologies. The majority of this investment has gone into fulfilment centres, software upgrades, and 'click and collect' rollout across the company’s store base.


Over the past several years, WMT has invested heavily to position itself as a dominant grocery and general merchandise omni-channel player. The company has consistent cash-flow generation, high returns on invested capital, and has a tendency to outperform global markets during periods of market volatility.


  1. slower-than-expected rate of growth in its grocery division
  2. market share loss to other players
  3. margin compression