Walmart expects its U.S. online sales to rise by 40% in the coming year to reach about US$11.5 billion, as it accelerates its move online to compete with Amazon and defend its leadership position in traditional retail.
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This will be a factor in driving overall sales up at least 3% but also comes with lower margins as fulfillment and delivery costs rise as it is offering more free and 1 to 2 day delivery options.
The company will also add another 1,000 new pick-up locations at its stores for its online grocery shoppers, while reducing the number of new stores being added to 25 U.S. stores in 2019. It still plans to open more than 250 new stores in overseas markets such as China and Mexico.
Although Walmart’s online presence remains small compared to Amazon, a key strategic imperative for Walmart is protecting its leadership in the traditional retail and grocery market especially as more shoppers shop online. Its online strategy is helping retain those customers and maintaining its market share in the grocery market against other traditional retailers.