WITH annual revenues of $420bn (£256bn), Walmart is the world’s largest company by sales. So it is unsurprising that it tells us something about the global economy. Its international business, which accounts for just over a quarter of sales, is booming. International revenues grew by 16.2 per cent in the second quarter, thanks to strong performances in Mexico, China and Brazil.
Things aren’t looking so good in the US. After years of dominance, Walmart, like America, is losing ground to more dynamic rivals. Dirt-cheap dollar stores, upmarket convenience shops and online retailers such Amazon are chipping away at its market share. Like-for-like revenues at US stores have fallen in each of the last nine quarters, although there are signs they will turn positive again before the end of the year.
Even if Walmart turns things around, however, American sales growth will be anaemic at best, and its US revenues will start to shrink again before long. Because consumer-facing businesses are at their best when they are fighting for market share – and winning it. The most successful innovations come from retailers who are expanding, not those who are managing decline.
Walmart will be a force to reckon with for many years to come, at least internationally, but its glory years in the US have passed.