Wednesday, 18 April 2018 07:59

How Walmart Could Dominate Embattled Retail

(New York)

The retail sector has been in tumult for years, but the struggles have intensified over the last few years as ecommerce has accelerated and physical stores are under pressure. The big winner so far has been Amazon, but lately, Walmart has been pushing back with a greatly improved and expanded ecommerce offering. Now, Walmart may be able to grab more market share in the US retail market by undercutting other retailers on price. Walmart has been lowering prices and is now 3-5% below other retailers like Dollar General, Kroger, and Big Lots for the same items. Many of the items are so-called “traffic-driving”.

FINSUM: We can comment on this from personal experience. It is remarkable, especially in rural America, how much minor price differences can entice consumers to drive 10+ extra miles to the store which is perceived as cheaper. We think these price differences will be material.

Published in Equities

(New York)

While the acquisition of Whole Foods by Amazon put a great deal of fear into other grocers and investors, things have quieted down since then. Now, the fears appear to be warranted as Amazon’s plan is becoming apparent. Amazon will offer Whole Foods groceries online at the same prices as in store, with free delivery for Prime Now members. The strategy will make it very hard for other grocers, like Kroger, to compete, as Amazon will likely lose money on every transaction. Kroger, and Walmart, are both launching their own delivery programs, but both will cost between $11.95 and $9.95, making them less competitive for short shopping trips.

FINSUM: Walmart can afford to lose money to grab market share, as can Amazon, but Kroger and other small grocers may be very vulnerable.

Published in Equities
Friday, 16 March 2018 11:24

Big Scandal Pending for Walmart?

(New York)

Walmart stockholders beware, the company might be in for a big scandal. A whistleblower internal to the company has come out claiming that Walmart is using misleading ecommerce results to make investors believe it is catching up to Amazon. A former director of business development says he was fired after raising concerns at the company about its “overly aggressive push to show meteoric growth in its e-commerce business by any means possible -- even, illegitimate ones.” “Wal-Mart sacrificed and betrayed its founder’s key principles of integrity and honesty, pushing those core values aside in its rush to win the e-commerce war at all costs”, said the whistleblower.

FINSUM: So reading these claims, we do not see any evidence of the claimant saying Walmart actually falsified financial results, only that it used aggressive tactics (such as underpaying vendors), so the damage may not be that bad.

Published in Equities
Wednesday, 11 October 2017 10:33

Now Amazon and Wal-Mart Want Your House Key


Amazon has come to dominate many businesses that interface with the everyday lives of people in the US and elsewhere. Walmart is now attempting to do the same. However, both companies have new businesses that are asking consumers to take what is definitely a deeper leap into the relationship—they are asking for your house key. Both Amazon and Walmart want to solve the issue of disappearing packages from your doorstep, so are asking consumers to give over house keys o delivery people can put them inside. Amazon is working with a small company that specializes in technologies which give people temporary access to your home.

FINSUM: This is amazingly invasive, but then again so is having your packages stolen from your doorstep. We would not be surprised if this worked.

Published in Equities
Tuesday, 10 October 2017 10:41

Walmart Looks Poised for Big Gains

(New York)

Everyone knows that Walmart is mounting a strong fight to try to grab market share ahead of Amazon’s unstoppable rise. Some are skeptical of Walmart’s push, especially into ecommerce, but the fact of the matter is, Walmart’s ecommerce business is now growing faster than Amazon’s. While it is a much younger business, it is still impressive traction. It expects the business to keep growing at 20-30% annually. The store is offering free 2-day shipping on orders over $35, and has in-store pickup of online grocery orders replete with employees to put the bags in your trunk. It is offering same day delivery of orders in New York City.

FINSUM: Walmart’s acquisition of looks like a winner already. We think the company is doing a good job building its ecommerce platform, and that is coming from a publication that used to be very skeptical.

Published in Equities
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