Wal-Mart Stores Inc. (NYSE:WMT) will be more Accessible in the Next Five Years

332

By Chris Hillman on November 10, 2014 Consumer Staples

Wal-Mart Stores Inc. (NYSE:WMT) have had a tough time in terms of growth in sales since the Great Recession. The company’s sales have remained flat for the past two years, whatever the reason may be. Can Wal-Mart Stores Inc. (NYSE:WMT) redeem its previous status or will it see more decline in the next five years?

Wal-Mart Stores Inc. (NYSE:WMT) is planning to enter grocery delivery. This may help them turn around. For seven consecutive quarters, the company reported declining numbers of customers in the stores throughout the US. After seeing this, the company cut their earning guidance and declared that sales would slow down online as well. An online grocery shopping system, which allows in-store and home deliveries, could change the outlook of the company.

Wal-Mart Stores Inc. (NYSE:WMT)’s rivals, like Amazon.com Inc. (NASDAQ:AMZN), are also introducing grocery delivery systems. The edge that Wal-Mart Stores Inc. (NYSE:WMT) has is that its brick-and-mortar stores are present all over the company, i.e. the distribution centers are already in existence. Amazon.com Inc. (NASDAQ:AMZN) realizes the importance of the physical locations and is currently looking to build its first retail store.

Wal-Mart Stores Inc. (NYSE:WMT) has experience in the field of delivering goods to homes since they did home delivery in other countries. The company has had other successes as well like emulation by other retailers of its ship-to-store model. With free in-store delivery and home delivery worth $5 – $7, the company will be able to expand the service and provide it to other markets eventually.

Wal-Mart Stores Inc. (NYSE:WMT) also has expertise in technology which will serve them well too. The company adopted the RFID tag at an early stage, advocated the use of barcodes as a labeling system and recently began the use of smart tags for keeping shelves stocked well. The company is not only a genius in logistics but also a whiz in tech.

The company, Wal-Mart Stores Inc. (NYSE:WMT), brought Kevin Systrom, the founder of Instagram, into their board of directors with the motivation to engage younger consumers. The company has also gained acquisitions in the past which give them the tools and experience that they need to reverse their track and go on the path to more sales growth.

The company just needs to become more accessible to the consumers to achieve growth in sales. The supercenters of the company are good for those who have a long shopping trip planned, but they are not good for the people who only want to buy a few items. The company realizes that this is a problem and is planning to open smaller neighborhood stores in this year and the next. The small-format locations will compete with the popular dollar stores.

Wal-Mart Stores Inc. (NYSE:WMT) is happy with the progress of their “Neighborhood Market” which have posted better sales performance. In the next five years, with Neighborhood Market stores and a home delivery system, Wal-Mart Stores Inc. (NYSE:WMT) will definitely be more accessible to its consumers and be growing in sales.