AS COVID-19 began to spread across America shoppers rushed to stock up on pasta, hand-sanitiser and loo roll. Other things equal, that should be good news for purveyors of these and other essentials. But other things are not equal: social-distancing restrictions have disrupted retailers’ supply chains and their operations. Amazon, whose e-commerce empire reported record sales in the first quarter, booked lower profits as a result of ballooning pandemic-related expenses. Could Walmart, with a quarter of America’s grocery market, 5,000-plus stores and 1.5m employees in America, including 235,000 temporary ones hired to cope with coronavirus-fuelled demand, cope any better with the pandemic?
On May 19th the answer came in Walmart’s earnings report for the three months to April. It was a resounding “yes”. Total revenue shot up by 9%, year on year, the highest rate in nearly two decades, to $135bn. Same-store sales rose faster still. The firm’s “omnichannel” sales, which combine online shopping with in-store pick-up, surged by 74%. Unlike Amazon, it also saw quarterly net income rise relative to the same period last year, by 4% to $4bn, despite nearly $900m in corona-spending (on things like “co-payments” for employee health bills, higher wages and bonuses for workers). The Arkansan behemoth is proving not only essential but nimble, too....
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This content was originally published by The Economist: Business. Original publishers retain all rights. It appears here for a limited time before automated archiving. By The Economist: Business