Walmart's Sales Growth has Really Slowed
For the past several years, SCDigest has done an annual analysis of "Walmart and Amazon by the numbers," taking a look at a variety of metrics across what quite arguably are the two most important retailers in the world.
The full analysis can be found on SCDigest's web site (Walmart and Amazon by the Numbers 2017 Part 2), but here we will take a look at just one chart, tracking the growth of Walmart's US sales since 2002.
Supply Chain Digest Says... |
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| In January of 2007, there were 657,000 warehouse workers, meaning there has been an increase of 300,000 warehouse jobs over that time period, or growth of about 46%. |
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While Walmart is an incredible giant, its growth has slowed dramatically in recent years. As can be seen in the chart below, Walmart's US sales (Walmart stores + Sam's Club) grew very rapidly in the beginning years of the 2000s, primarily by adding new superstores carr
ing groceries at a rapid pace into new markets.
But that growth soon decelerated, and in the recession year of 2009 started a pattern of very low growth that is not much above inflation on average, meaning real growth is almost flat or up a percent or so at best. US sales reached $365.2 billion last year, about double the $188 billion the company had in 2002, but the pace of that growth has obviously slowed substantially down. The Cumulative Average Growth Rate (CAGR) has averaged an impressive 5.8% since 2002, but has slowed to 2.3% since 2010.
Not shown here, but surprisingly, international growth continues to plateau, despite an awful lot of attention and investment there. Walmart international sales last year were $116.1 billion, down from $123.4 billion in fiscal 2016, though the rising dollar is a factor in that decline. Still, international is clearly not the Walmart growth engine once imagined.
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Will Dick's Sporting Goods win by Cutting Vendors and SKUs?
Ed Stack, CEO of Dick's Sporting Goods, announced that the company has established "a new merchandising and vendor matrix" that will result in closer relationships with some suppliers while pulling back from dealings with others. In the end, implementation of the plan will mean up to 20% of the chain's vendors will be cut before the end of the year.
Strategic vendors, grouped into "Segment A," will be companies that "will invest significantly in our business both online and in-store and we will invest significantly in their business," said Stack in a presentation to Wall Street analysts.
"Segment B" vendors will be those that Dick's has "a transactional relationship with" while "Segment C" vendors will have their products discontinued.
Dick's CEO was asked about the timing of the move in light of the changing competitive landscape. Ten sporting goods chains have filed for bankruptcy since 2015, according to USA Today. The Sports Authority, the second largest chain in the category, liquidated in 2016. Dick's acquired 114 million shopper files and 25 million e-mail addresses from The Sports Authority last year along with its brand name and e-commerce domain.
"We felt that it was really the right time to review, really, an in-depth review of everything that we do in the business," said Stack. "As we looked at this, we felt that it was the right time to consolidate our vendors and we will continue to have a good, better, best strategy that isn't really going to change."
Stack said Dick's doesn't "expect to give up any sales or margin rate" due to its vendor consolidation. He said the action will be spread across categories and enable the chain to "showcase our private brands more and drive that business, which we've indicated we expect to be approximately $1 billion this year."
Comparable sales, including online and stores, for the Dick's chain along with the Field & Stream, Golf Galaxy and Golfsmith businesses grew five percent for the company in the fourth quarter. Dick's omnichannel comps increased 5.3%, as traffic improved 2.9% and the average ticket rose 2.4%.
Number of Warehouse Workers Continues Significant Rise
 The demands of ecommerce fulfillment and other factors are leading to growing demand for workers in warehouse and distribution centers, in what is a powerful multi-year trend.
According to the US Bureau of Labor Statistics, there were 957,000 warehouse workers in January, up almost 10,000 from the December number even as the peak season for distribution activity came to an end.
Over the past year (January to January), the number of warehouse jobs in the US is up about 71,000, or 8%.
But that is simply the continuation of a multi-year trend.
In January of 2007, there were 657,000 warehouse workers, meaning there has been an increase of 300,000 warehouse jobs over that time period, or growth of about 46%.
That is finally starting to put upward pressure on wages. Nationally, however, the BLS finds the average hourly wage for non-supervisory warehouse workers in December was $16.08. That was up from $15.74 in December of 2015, for an increase of about 2.2% in one year. In some areas, DC jobs are being advertised at over $18 per hour.
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