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Sept. 9, 2022
Supply Chain Digest Flagship Newsletter


This Week in SCDigest

bullet Supply Chain News: Walmart and Amazon by the Numbers 2022 Part 2 bullet SCDigest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet New Stock Index

New Chain Cartoon Caption Contest!

bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts




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Lessons Learned from Dozens of Cloud WMS Implementations




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Supply Chain Graphic
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Top Digital Investments in Eyes of CEOs and CFOs

This Week's Supply Chain Numbers

Weak Chinese Economy Pushing Commodities and Inflation Down
Steel Giant Closing German Mills due to Nat Gas Prices
Amazon Sees On-line Fall Again
Container Rates in Free Fall


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 This Week's SCDigest OnTarget Newsletter

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Six Ways Supply Chains Can Transform Packaging
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Linda Dunn

Director, Georgetown University's School of Continuing Studies

What US parcel carrier did DHL disastrously acquiire in 2003?
Answer Found at the
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Supply Chain News: Walmart and Amazon by the Numbers 2022 Part 2

My column two weeks ago on Walmart and Amazon by the Numbers 2022 once again proved very popular. I am very pleased to be back this week with part 2, as we dig into the data from the world's two most important retailers.



That means Amazon's CapEx was almost $14 billion more than operating cash flow, while in 2020 operating income exceeded CapEx by about $26 billion.

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To first put the numbers from both of my columns in perspective, let's first look at the rise of US ecommerce. According to the Commerce Dept., ecommerce sales were about 14% of total retail sales last year, up from about 9.9% in 2018 - but those total retail numbers include sales of cars, gas stations, restaurants and a few other categories that are not really relevant for comparison.

So, we run the numbers based on the same formula we used in part 1 of this series to analyze Walmart's share of US retail, for which we take total retail and subtract out those non-relevant categories . Using that formula, ecommerce sales were a much higher 20.6% of total US retail sales in 2021, up a percentage point from 19.5% in 2020 and 14.9% in 2018, as shown in the graphic below. Of course, that share is much higher in some product categories, such as electronics and apparel.


The pandemic was very good for ecommerce, as seen in the big jump in 2020, but is cooling considably in 2022. Note full size graphics are available here:




In my first column, we also graphed the annual percentage growth for Walmart's US retail sales, which slowed noticeably a few years back but have rallied the last few years. After a flat 2019, Walmart US sales jumped an amazing 8.7% in 2020 and then 6.3% in 2021. Below we show the Walmart numbers in absolute terms across its three reporting units: US, Sam's Club, and International.



Walmart has had a total revenue CAGR of 4.25% for total sales from 2005 through 2021, but that clearly came much more from the first half of that period than the last few years. Since 2015, total revenue has grown 4.7% annually, but that's with the big rises in US sales the last two years.


Over the same 2015-2021 period, Walmart international actually fell about 2% per year, Sam's Club basically was flat and the fastest growth was seen in the most mature segment, US retail, at 4.4%. Walmart grew its US store sales by $24 billion last year - the size of a major retailer on its own.

Switching gears, Amazon for years received much criticism for its consistent failure to really make any money despite the rapid revenue growth, but that started to change in 2016 and really jumped in 2018, as can be seen in the chart below. Net income for 2021 was 33.3 billion, up 56% from 2020, and reached 7.1% of sales, both those numbers easily setting company records.



However, it's worth noting that a huge 40% of its operating income came from Amazon's AWS web services unit.


Walmart, by comparison, had profits of $13.7 billion last fiscal year, almost $20 billion below Amazon's number, and basically flat versus fiscal 2020 even with the big jump in US sales. Walmart's net income was only 2.3% of sales, far low lower than Amazon's 7.1% margin percent.


During all the years of no profits, some observers said to look at Amazon's cash flow from operations instead of profits, a view which certainly painted a more favorable picture.


Operating cash flow as a percent of revenue has generally been much higher at Amazon than at Walmart for many years - and was more than two times so in 2021, as shown in the chart below.



But there is operating cash flow and then what is called "free cash flow," or operating cash flow minus capital expenditures, and here the story is also interesting.


Amazon had an $46.3 billion operating cash flow in 2021 (down 30%) and had CapEx of about $60 billion, up from $40 billion in 2020. So that means CapEx was almost $14 billion more than operating cash flow, while in 2020 operating income exceed CapEx by about $26 billion. Lots of fulfillment centers still being built.

Walmart, on the other hand, had CapEx of about $13.1 billion - up from from $10.3 billion in 2020. With $24.2 billion in operating cash flow, that means CapEx of about 54% of OCF, though with Walmart now generating far less OCF than its rival. (Note: as a proxy for official CapEx, I am using spending on real estate, equipment and technology by Amazon).

Importantly, Walmart also has to pay a dividend from its cash flow- $6.2 billion worth last year - while Amazon does not. So Amazon had negative free cash flow last year. With Walmart if you subtract the dividend after also subtracting CapEx from OCF leaves $11.1 of free cash flow, way down from $19 billion in 2020.


The dividend factor is huge and a giant advantage for Amazon while it lasts.


I have lots more, but I am out of space. Hope you have enjoyed this look at the numbers.


Any reaction to these numbers from Amazon and Walmart? Any other data you would like to see? Let us know your thoughts at the Feedback button or section below.

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What US parcel carrier did DHL disastrously acquiire in 2003?

A: Airborne Express

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