Walmart has unveiled plans to increase its focus on e-commerce operations to fend off the growth of rivals such as Amazon and Target, but warned the move will impact profits over the short-term.
CEO Doug McMillon clearly underlined Walmart’s aims by noting: “This company over time will look like an e-commerce company”. The plans include increased investments in e-commerce and technology, with McMillon saying Walmart would look to “offer new solutions that create a seamless shopping experience.”
The move is part of Walmart’s overall plan to drive growth, which include investing in store revamps, slowing down new-store openings, and rely more on like-for-like sales. In fiscal 2018, Wal-Mart plans to build 35 Supercenters (down from 69 last year) and 20 Neighborhood Market stores (down 161 last year). It also said it would look to “operate with discipline” as it aimed to deliver “strong, efficient growth”.
As a result, Walmart now expects earnings for the fiscal year ending 31 January 2018 to be flat, compared to a previous forecast for growth. Meanwhile, growth in earnings-per-share for fiscal 2019 are now expected to be the lower end of its 5%-10% range announced earlier.