How Will Wal-Mart’s Share In The U.S. Retail Sector Trend In The Next Three Years?

Like most retailers, Wal-Mart (NYSE:WMT) is facing significant competition from internet-based retailers, as U.S e-commerce grew at nearly 15% in 2015. Despite this challenging environment for brick-and-mortar retailers, Wal-Mart has been able to sustain its market share in the retail space. Wal-Mart’s revenue grew at 2.6% year-over-year (y-0-y) in 2015, whereas the U.S retail sector grew at only 0.2% y-o-y. While the U.S. retail sector is projected to grow at a compound annual growth rate (CAGR) of 2.4% from 2016 through 2018, we forecast Wal-Mart U.S. revenues to grow at a CAGR of 2.1% during the same period, slower than the retail market.Wal-Mart has managed to grow despite the competition as it has managed to adapt to the changing market. The company has converted many of its discount stores into small-format stores (traditional grocery stores) and placed them strategically within city limits to increase foot traffic. Groceries constitute for more than 50% of the company’s overall revenues. Wal-Mart has also been giving incentives to customers to shop online in a bid to combat e-commerce competitors. Wal-Mart has also been promoting its Wal-Mart Pay mobile wallet service, an online grocery pickup service and partnerships with Uber for grocery deliveries. Though these initiatives will take some time to show results, the company has done a solid job of adapting to the changing trends.

Have more questions about Wal-Mart? Click on the links below:

• What is Wal-Mart’s Fundamental Value Based On Expected 2016 Results?
• Why We Lowered Our Price Estimate For Wal-Mart by 10%
• Wal-Mart Strong Q1 Earnings: EPS, Revenue Beat Expectations
• How Is Wal-Mart’s Revenue Composition Trending?
• Is Wal-Mart Exiting China With The Yihaodian Sale?