Walmart Inc. stated on Wednesday that the business would be under pressure from inflation this year and that it would reduce recruiting while developing its automation technology.
“We believe, over time, the number of associates will grow, but at a slower pace than in the past as we complement people growth with technology and automation,” Chief Financial Officer John David Rainey said at the company’s investor meeting in Tampa, Florida.
Walmart claimed that the impact of inflation on its business is still being felt as consumers choose lower-margin consumables over higher-margin fashion and home items.
Rainey’s remarks follow the retailer’s announcement on Tuesday that it anticipates two-thirds of its locations would be automated within three years, cutting expenses associated with processing packages by 20%.
According to Reuters, hundreds of employees at warehouses that process purchases from Walmart.com were laid off last month.
Automation will also assist the business in avoiding inventory build-up, which occurred last year as a result of consumers making less purchases overall due to sharp increases in food and petrol prices.
According to CEO Doug McMillon, automation will “bring us closer to inventory optimization than ever before.”
Along with sticking to its April quarter, full-year, and three to five-year forecasts of 4% sales growth and over 4% operating income growth, the company, which has more than 5,000 stores in the United States, also met these goals.
The investment Walmart makes in alternative revenue streams, such as advertising, fulfillment services, and membership programs, start making higher contributions to profitability over the next five years compared to its core brick-and-mortar retail business, said Rainey, adding that Walmart was at an inflection point.
“(With the investments) We think the opportunity for operating income growth over the next three to five years could be better than what we’ve outlined.”
(Adapted from Investing.com)
Categories: Economy & Finance, HR & Organization, Strategy, Sustainability
Leave a Reply