Positive trend: McMillon during a panel session on a gathering of top executives in Switzerland. The Walmart chief executive officer said they are excited about its momentum and is well-positioned to start this financial year. — Bloomberg
SHANGHAI: Walmart China’s strong fourth-quarter growth, propelled by its high-end membership store Sam’s Club and eCommerce services, is a sign of steady recovery in the fast-moving consumer goods and retail sectors this year, say industry insiders.
According to the global retailer’s financial results released on Feb 21, Walmart delivered strong revenue growth globally in the fourth quarter, with strength in stores and eCommerce.
Total revenue in the quarter was US$164bil (RM734bil), up 7.3% year-on-year (y-o-y).
Walmart China achieved net sales growth of 13.5% and comparable sales growth of 13.3% in the quarter.
Continued strong sales growth at Sam’s Club, eCommerce and improving hypermarket performance have been attributed to the performance in the Chinese market.
In the fourth quarter, eCommerce net sales, which contributed 48% of its net sales in China, increased 70% y-o-y.
The reports said the Chinese market is one of the factors that have led to the increase in Walmart International’s net sales of 2.1% to US$27.6bil (RM124bil).
“We’re excited about our momentum. The team delivered a strong quarter to finish the year, and, as our results in the last two quarters show, they acted quickly and aggressively to address the inventory and cost challenges we faced last year.
We built momentum in the third quarter, and that continues. We are well-positioned to start this financial year,” said Doug McMillon, president and chief executive officer of Walmart Inc.
In 2022, Walmart’s revenue was US$611.3bil (RM2.7 trillion), up 6.7% y-o-y. Its net income was US$11.7bil (RM52bil), down 14.6% compared with the previous financial year, which is the first decline of its kind in six years.
According to Kantar Worldpanel China, Walmart China’s fourth-quarter sales growth stood out in the sector, as revenues of China’s fast-moving consumer products fell 4% y-o-y, with hypermarkets falling 10.9% and supermarkets falling 11.7%.
However, sales of smaller supermarkets grew 11.3% in the quarter due to their convenient location in communities, according to the report.
“Thanks to the stimulus policies to increase consumption from local governments, out-of-home consumption and brick-and-mortar traffic gradually rebounded at the beginning of this year,” said Kantar.
Walmart’s market share in China rose from 5.2% to 5.5% last year compared with a year earlier, mostly driven by Sam’s Club’s steady growth, Kantar’s report showed.
“Sam’s Club performed exceptionally well with its distinctive value proposition and locally appealing product offers, as well as great omnichannel experiences for its middle-income members in China,” said Jason Yu, general manager of Kantar Worldpanel China.
The Walmart hypermarket also improved its financial performance, Yu said.
“However, the hypermarket sector remained challenging, so more transformation and efficiency drives are required to sustain Walmart’s profitable growth,” he said.
In the past year, Sam’s Club has opened six stores in China, making it a leader in the competitive membership format category, where the entrance of Metro, an arm of Wumart Group, and Hema X, the retail unit of Alibaba Group, further escalated the rivalry, according to Kantar. — China Daily/ANN
