Consumer and Institutional Favorite Walmart Strengthens Core
Posted on 05/03/2023
In the retail economy, Walmart looms large. Its 4,737 stores in North America make it one of America’s most recognizable brands. The company has announced store closures in Portland and Chicago in recent weeks, because they are unprofitable. Unprofitable Walmarts have cost the company tens of millions per year, and losses were rising as Walmart pulled the plug. More store closures may be announced, as Walmart concentrates on its core, successful stores and online shopping. CEO Doug McMillon, who SWFI reported on previously for his push into the e-commerce, is not only closing stores, but calling the Walmart shopper “discerning,” or hesitant to purchase lately. It has also been announced that self-checkout shoplifting is a problem. Walmart President in Canada Gonzalo Gabara said Walmart is taking steps to resolve this: “We have been working on internal processes. We have been working on investing in technology.”
Despite concerns, the company remains successful, earning sales growth above 8% per year. Higher end shoppers are said to have flocked to Walmart instead of more expensive stores. Others point out the cost of inflation, and argue that Americans are buying fewer goods, but paying higher prices for them. Walmart predicts 3% growth in the next year.
Large pools of capital and sovereign wealth funds have been investing in Walmart in Q2 2023. Irish Life Investment Managers, with assets under management of €101 billion picked up 219,900 Walmart shares in April, 2023, on behalf of clients. Irish Life explains “We work for a wide range of institutional clients including insurance companies, wealth managers, pension schemes, fiduciary managers and sovereign wealth funds across Europe and North America.” Irish Life still has a ways to go to match Norway’s US$ 1.2 trillion Government Pension Fund Global’s position of 17,988,929 shares.
