Walmart’s earnings surge as Americans loaded up on toilet paper forts
Welcome to FoC news, where I share interesting financial and business news and how it can relate to you. All of it, sprinkled with amateur humor and really bad photoshopping. Let’s dive right in.
While the coronavirus pandemic is destroying and quickly bankrupting a ton of retail shops, not every retailer is feeling the same effects.
In fact, in its latest quarterly earnings call, Walmart reported a 4% rise in net income to $4 billion.
I guess when millions of people are hoarding toilet paper and using all that extra supply to build TP forts in their homes, it REALLY DOES make a difference.
A large part of the sales came from Walmart’s e-commerce business, which rose by 74%, and catered to home deliveries and online pickups.
They even analyzed their sales in April after Americans received their government stimulus checks and yep, there was a surge in sales then.
But that should have been obvious. After all, people need to watch Tiger King on big screen TVs.
Walmart is doing so well that they hired more than 235,000 workers since mid-March and all of their 5,000+ stores have remained open this whole time.
During this time, Walmart has spent $900 million dollars in COVID related expenses such as employee bonuses, masks and gloves, and those plastic shields that you now see everywhere, which used to only be reserved for Chinese restaurants in the ghetto.
The Walmart brand is doing so well that they even announced that it will be shutting down their e-commerce site Jet.com, which they paid $3.3 billion for in 2016.
Imagine having so much cash that you’re willing to throw away something you paid $3.3 BILLION for…
I won’t even use a full paper towel sheet if I don’t have to.
So what does all of this mean for you? Well, it really shows the big divide between businesses, even well-known retail brands.
Most suffer, but some are thriving. Brands like Walmart will only continue to increase their market share.
For the last decade or more, the divide between income inequality has become bigger and more dramatic. And that goes for individuals, as well as businesses.
With giants like Walmart absolutely crushing it during global pandemics, it’ll only make it tougher and tougher for small businesses to compete.
However, if you are a small business, then in my opinion, there is still one thing you can do. And that is to use your smaller size to your advantage.
Walmart may be booming on the retail and e-commerce side of things, but they’re a general store for the masses.
Your advantage of being a smaller business is flexibility and greater attention to your customers.
You also have the ability to make decisions and move faster, such as getting your retail shop online and becoming a specialist on catering to a very specific demographic.
If you’re the go-to specialist for something, then Walmart cannot compete against you.
Nor will they care to.
Concentrate your efforts on what you can control, instead of spending energy on trying to compete directly with behemoths like Walmart who sell practically everything but their secret weapon: money-growing trees.
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This is Alan signing off, and here’s to you investing in your knowledge and future. I’ll see you soon.