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Walmart was prepared for how customers are shopping in the pandemic

Sabri Ben-Achour Aug 18, 2020
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People walk past a Walmart in Washington, D.C. The company's sales surged in the second quarter. Andrew Caballero-Reynolds/AFP via Getty Images
COVID-19

Walmart was prepared for how customers are shopping in the pandemic

Sabri Ben-Achour Aug 18, 2020
Heard on:
People walk past a Walmart in Washington, D.C. The company's sales surged in the second quarter. Andrew Caballero-Reynolds/AFP via Getty Images
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Walmart reported earnings Tuesday, and the retailer is killing it. E-commerce sales are up 97%, and same-store sales are up 9.3% in the second quarter. It looks as if Walmart is doing something right in this pandemic economy.

If retail in America is a giant consumerism pie, then Walmart’s slice is getting bigger.

“Walmart is gaining share in pretty much every category,” said Charlie O’Shea, senior retail analyst at Moody’s.

Part of Walmart’s success has to do with what it is selling: essential goods that people still buy during a pandemic, like groceries. Walmart’s food operation is huge at $184 billion in sales last year, nearly one and a half times Kroger’s sales.   

“Anywhere between 55% and 60% of Walmart’s business would normally be consumables,” O’Shea said.

The other key to Walmart’s success — probably the bigger key — is the many way in which Walmart sells. It provides online ordering, delivery, pick up at the curb and in-store shopping. 

“They made a full-court press on e-commerce very successfully,” said Sayan Chatterjee, a professor at the Weatherhead School of Management at Case Western Reserve University.

However customers want to hand over their money, Walmart was ready even before the pandemic. Finally, Walmart has something else to thank for its success, according to Andrew Lipsman, principal analyst at eMarketer. That would be the government.

“Government stimulus checks and unemployment assistance — those dollars are probably more likely to get spent at Walmart than at any place else,” Lipsman said.

Lipsman added Walmart’s success is emblematic of a bigger trend in the pandemic. It’s the biggest stores that have been able to lean into the moment and adapt. Smaller and medium-size businesses are buckling.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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