Walmart’s online sales surged 74% last quarter as shoppers stocked up on food and wellness items during the coronavirus pandemic.
The nation’s largest retailer said overall sales rose nearly 9%, to $134.6 billion, in the February through April period, compared with the same period last year, offering a stark reminder of how the pandemic is boosting some retailers while hastening the demise of others.
The company, which sells groceries and other “essential” items, has kept all 5,355 U.S. Walmart and Sam’s Club stores open during the ongoing crisis. It reported a first-quarter profit of $3.99 billion, up about 4% from last year, on Tuesday.
“More than ever, the news this quarter is our amazing associates,” Doug McMillon, the company’s chief executive, said in a statement. “They are rising to the challenge to serve our customers and our communities.”
But worker advocacy groups say the company’s gains have come at the risk of employees’ health. At least 22 Walmart employees have died from covid-related complications since March, according to labor advocacy group United for Respect.
Walmart said it is providing free masks and gloves to employees, and has installed sneeze guards at its checkouts. It has also announced two rounds of bonuses – $150 for part-time workers, $300 for full-timers – who work through the pandemic.
The retail giant also announced Tuesday that it is discontinuing the e-commerce site Jet.com “due to the continued strength of the Walmart brand.” Walmart paid $3.3 billion for Jet.com in 2016, and continued to invest heavily in the site in hopes that it would help win over younger, more affluent, big-city shoppers from Amazon. (Jeff Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
The coronavirus pandemic, analysts say, has accelerated a widening gap among the country’s largest, most successful chains – like Walmart – and the rest. Retailers temporarily closed more than 260,000 stores because of the coronavirus outbreak, all but bringing business to a halt for many companies that rely on in-store shoppers to drive the bulk of their sales. Four major retailers – J. Crew, Neiman Marcus, Stage Stores and J.C. Penney – have already filed for bankruptcy this month, and analysts say they expect others to follow as more companies run out of cash and the economy continues to sour.
Retail sales in April plunged 16.4%, the largest drop ever, as consumers stopped buying clothing, shoes, furniture and other discretionary items. Grocery sales, however, rose 13%, while online spending grew 21%, as more Americans hunkered down at home, giving a lift to some of the country’s largest retailers, like Walmart, Target and Amazon.
“It’s a self-fulfilling prophecy: the bigger, stronger players are taking even more market share,” said Mickey Chadha, senior credit officer at the rating agency Moody’s. “And the companies that were weak to begin with, they are only going to become weaker.”