Financial Results Continue to Improve in 2016, To Continue Differentiated Competitive Advantages in 2017
Walmart plans to open up to 40 new stores & remodel 50 stores; Accelerating e-Commerce collaboration and development
February 22, 2016, Zhuhai - Walmart China today held its annual Year Beginning Meeting (YBM) in Zhuhai and announced comp sales for its Hyper and Sam’s Club saw a significant growth in 2016. The company is pleased about last year’s sales growth and profit performance. Walmart has also just released its earnings that total revenue of Walmart Stores Inc. was $485.9 billion in fiscal year 2017. Excluding currency, total revenue was $496.9 billion for the full year, an increase of 3.1%. Walmart’s net sales in China grew 5.4 percent in Q4 of fiscal year 2017 and comp sales increased 2.3 percent with a 5.2 percent increase in comp ticket. The strength in the quarter was broad based across hypermarkets and Sam’s Club. Fresh and grocery were strongest performing product categories. Walmart said, the company is excited about the future of e-Commerce in China and the strategic alliance with JD will continue to expand presence throughout the country and offer customers new and exciting products through flagship sites on JD’s platform. Meanwhile, at YBM Walmart China announced its 2017 plans to open 30-40 new stores including 3-5 Sam’s Clubs, remodel 50 existing stores, test new hypermarket models, continue to invest in logistics and distribution centers, strengthen Private Brands and Direct Imports and accelerate e-Commerce collaboration, showing great commitment to and confidence in the Chinese market.
Dirk Van den Berghe, President and CEO, Walmart Asia and China, emphasized Walmart’s future plan to strengthen its omni-channel approach, continue differentiated competitive advantages and reiterated Walmart’s confidence in Chinese market at 2017 Walmart China YBM.
Dirk Van den Berghe, President and CEO, Walmart Asia and China, said, “in 2016, We achieved the best results over the past 5 years. For 2017, we will move faster to improve the overall customer experience. We will continue our strategic alliance with JD and strengthen omni-channel approach, providing multiple e-Commerce solutions for online ordering, home delivery and mobile payment, to create seamless online and offline shopping experience. At the same time, we will provide best fresh products, private brands and direct imports to our customers and deliver a differentiating competitive advantage and value proposition.”
Over the last few years, Walmart has kept a steady pace of growth in China. In 2016, Walmart opened 24 new stores, including 21 hypermarkets and 3 Sam’s Clubs. New stores have shown great performance than expected. Walmart also invested to upgrade approximately 60 stores, refreshing in-store physical conditions and facilities and optimize product categories, which helped to increase the sales significantly. According to Walmart’s customer survey (NPS), customer’s satisfaction has been greatly improved, a record high in recent years. The NPS Project won 2016 Top 10 Best Practice Cases of Service Innovation Awards. Meanwhile, Sam’s Club, the high end membership-only club has continued its leading position in the market. With “Members First” as top priority, Sam’s Club had a successful membership upgrade in 2016, the first in 20 years,and served nearly 1.8 million members in China. Sales of Sam’s Club in Futian, Shenzhen has ranked first globally for 9 years consecutively.
Comp sales for Walmart China’s Hyper and Sam’s Club saw a significant growth in 2016 and new stores have shown great performance than expected.
Facing a fast-changing market, Walmart China identified ‘Stronger & Faster’ as the development goal in 2017, accelerating online and offline collaboration. For 2017, Walmart plans to open 30-40 new stores in China, including new hypermarket model. Walmart will also invest more than 300 million RMB to upgrade approximately 50 stores. In addition to the current nationwide network of about 20 distribution centers, Walmart will increase investments to expand supply chain capacities, relocate Chengdu DC by increasing 60% of warehouse space, improving 160% of storage capacity and 60% of maximum handling cases as well as build the first self-designed fresh distribution center with storage capability in Guangdong in accordance with Walmart international standard, further upgrading cold chain logistics ability.
Moreover, Sam’s Club plans to open 3-5 new clubs in 2017, including Beijing and Shenzhen, which already have two clubs respectively, or new cities such as Nanchang, Nanjing and Changsha. The new club number, probably counting for 1/3 of current existing club number, is expected to be a new record high since Sam’s Club entered China 20 years ago. Sam’s Club will introduce more differentiated products to highlight member value and to drive sales by its private brand Member’s Mark and direct imports.
As for e-Commerce, Walmart established strategic alliance with JD in 2016, with key initiatives already in operation including Sam’s Flagship Club, Walmart Global Shop and express delivery by JDDJ. In 2017, Walmart will continue to deepen partnerships and strengthen online and offline collaborative services including plans to bring in more products and services in more cities. Furthermore, Sam’s self-managed e-Commerce platform including www.samsclub.cn and APP will further expand service scope and enhance fresh delivery services along with new club openings.