Walmart traders flip to promoting and healthcare after the pandemic growth

© Reuters. FILE PHOTO: Shoppers at Walmart Superstore during the Coronavirus Disease (COVID-19) outbreak in Rosemead

By Aishwarya Venugopal and Melissa Fares

(Reuters) – Walmart (NYSE 🙂 Inc investors and analysts will likely look beyond the retail giant's slowest sales growth in the same store since the coronavirus crisis began when it reports quarterly results on Thursday and instead focuses on the company's ambitions diversify beyond retail.

Walmart's online sales nearly doubled, and comparable sales growth hit high single-digit figures every quarter in 2020 as Americans bought groceries and other essentials during the coronavirus pandemic. During this time, the retailer also invested heavily in advertising and health services.

"They think a broader picture of their clients, so it's not so much every transaction, but how do we think more holistically," said Chad Oviatt, director of investment management at Huntington Private Bank.

Walmart is starting to merge other parts of its business with the main retail and e-commerce business, he added.

The company began changing its media strategy in 2019 by severing relationships with its external advertising partner and taking up the business as Walmart Media Group on its own, now renaming it Walmart Connect. Annual advertising revenue is projected to be nearly $ 1 billion in 2020.

Walmart, headquartered in Bentonville, Arkansas, has strengthened its presence in the healthcare industry with its own insurance business and an expansion of its US health centers that provide affordable medical services such as dental care and advice to customers.

"We are excited that Walmart is expanding its vision beyond retail and e-commerce and focusing on building a high performing ecosystem including advertising, merchant services, health services and digital payments," said Joseph Feldman, analyst at Telsey Advisory, in a note.

"These new elements of the ecosystem are more profitable than traditional retail and should work together to strengthen relationships with customers and generate profitable market share gains," he said.

Walmart will release fourth quarter results on Thursday. According to Refinitiv estimates, analysts expect sales in the same business of 5.80%, the slowest of the year.

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