Walmart CEO Doug McMillon hasn’t noticed American consumers pulling back on spending to start this year, despite some fear that’s been the case amid a tariff tiff with China and some Americans receiving fewer dollars back in tax refunds in 2019.
“I don’t know that I can call the whole year,” the CEO of the world’s largest retailer told CNBC’s Courtney Reagan Thursday afternoon from the Global Retailing Conference in Tuscon, Arizona. “I think … the consumer is in pretty good shape. I think the customer is in about the same shape they were in [the fourth quarter].”
Walmart during the fourth quarter reported earnings and sales that topped Wall Street estimates, boosted by the retailer’s still-growing e-commerce business. The company is forecasting its digital sales will be up 35% in 2019, slightly less than growth of 40% in 2018. It continues to make investments online to compete with Amazon, including launching a new baby registry, growing its online grocery business and acquiring start-ups like Art.com and digitally native lingerie brand Bare Necessities.
“The magic for us is how we bring the two together,” McMillon said, referring to both Walmart.com and the retailer’s thousands of stores globally. “It results in an omnichannel experience. … That is our advantage, and that is what we are working on.”
It’s true that Walmart has taken a hit on Wall Street for some of its digital investments, which have eaten into profits in the near term. Amazon has historically gotten away with this more than its rivals. But McMillon says Walmart is focused on the long term.
“To build an e-commerce business takes some time,” he said. “We are trying to position the company for another generation. … No doubt we are making a bet on change.”
Walmart shares have climbed about 12% over the past 12 months, compared with Amazon’s growth of nearly 30%.