Brick-and-mortar stores are supposed to be in a great deal of trouble. As the owners of America’s large retail chains enter the holidays, there is an expectation that COVID-19 will keep people out of stores and force them online. Many consumers became used to e-commerce shopping in the early stage of the pandemic from March through May when retailers were forced to close.
The expectations for Walmart Inc.’s (NYSE: WMT) holiday results are optimistic. Its stock has risen 27% so far this year, compared to the S&P 500 which is 11% higher. In contrast, the shares of Macy’s Inc. (NYSE: M), another iconic American retailer, are off 57%.
Walmart has several advantages over most other retailers. One is its size. It is the largest American retailer by far, with annual revenue of almost $550 million. It has 4,756 stores in the United States.
Walmart has been successful with two e-commerce models. The first allows people to order online and pick up their orders at the curbside at Walmart’s store locations. This is considered safer than shopping in stores where people are more likely to become infected with COVID-19.
Walmart has the second largest e-commerce operation in America after Amazon.com Inc. (NASDAQ: AMZN), according to several pieces of research. Even if it has to shutter stores, it can continue to drive substantial revenue. It has built out the logistics systems to make the fulfillment of online shopping viable at scale.
There is a little over a month until Christmas. Investors appear to think Walmart is ready.
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