Walmart’s $14B supply chain moves
With pressures from the amazonian giant, and in preparation for growth, Walmart looks to improve its supply chain network. Looking to increase supply chain capacity through automation, the world’s largest retailer is investing almost $billion in automation technologies, focusing mainly on the US.
In Walmart’s Q4 earnings presentation, CFO Brett Briggs said that the company is at least a year ahead of expectations, thanks to its 2020 revenue increase. Spurred by the potential for further growth, Walmart makes a move on key markets, investing in automation and technology, fulfilment capacity and supply chain.
Briggs stated the company would leverage automation in distribution centres to deliver aisle and department-ready pallets to stores. Expanded eCommerce assortment is expected to shorten shipping time and reduce costs. Existing stores will enjoy improved pickup and delivery capacity, efficiency initiatives and merchandising programs.
“Now is the time to play even more aggressive offence. We're winning, and we intend to keep pushing the ball aggressively down the field. Over the next few years, we're going to step up capital investment, primarily in the US, to improve the customer experience, support growth and drive efficiencies,” said Briggs.
He further stated that the new investments should position Walmart for annual growth in sales and operations profit of at least 4 per cent (the equivalent of a Fortun 100 company.)
“Certainly, we had tailwinds during the year, but we are performing extraordinarily well. This strong performance has allowed us to invest in the future of the business, invest in our associates, and give good returns to shareholders. From a position of great strength, we are now going to accelerate investments in supply chain, technology, automation, and our associates, allowing us to stay ahead of shifts in customer behaviour,” said CEO Doug McMillon on their Q4 2021 Earnings Call
Walmart’s 2020 total revenue tallied up to a pretty $559 billion, an increase of almost 7 per cent from 2019. US eCommerce sales skyrocketed 79 per cent while comparable sales in the US grew 8.6 per cent.
Walmart also announced it would be raising its average wage for associates to above $15 per hour.