Walmart continues to grow thanks to online, grocery sales

BENTONVILLE, Ark. (NBC) – As we head into the most important shopping season of the year, retail giant Walmart is hoping to leverage recent online success to continue its pattern of growth.

Walmart continues to grow sales in the U.S. thanks largely to its grocery business.

U.S. comparable sales grew for the 21st straight quarter with both strong traffic in stores and growth online. Digital sales increased by more than 40%.

While Chief Financial Officer Brett Biggs told NBC many categories were strong, the retailer’s food business and its expanding delivery and pickup options is what’s driving shoppers to spend.

While analysts are largely positive about Walmart’s grocery programs, there is some concern about where growth will come from next.

While new online grocery options are driving business to Walmart, grocery has low margins, making it a less profitable than a category like clothing. And the retailer’s online business is still expected to lose more money this year than last year.

In the prepared remarks, CEO Doug McMillon addressed the issue. “Our strength is being driven by food, which is good, but we need even more progress on walmart.com with general merchandise,” McMillon said. “We need to translate this repetitive food and consumable volume into a stronger walmart.com business that’s profitable over time, so that’s what we’re working on”

In the meantime, the bigger near-term test is the holiday season.

According to analysts, the company is still working to get the right assortment of general merchandise on Walmart.com in order to compete with the likes of Amazon and Target.

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