Well-known retail giants Home Depot and Walmart delivered a grim outlook for the future of retail spending in 2023.
Although both Home Depot and Walmart sell an assortment of goods, their earnings give us a glimpse of what is to come.
This week we talk about the year to come and take a look at targets plan to double down on e-commerce in 2023.
THIS WEEK’S HIGHLIGHTS
- Next Day Delivery: Targets $100 million sortation centers.
- Growing pains: Walmarts gives us a glimpse Into the future.
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Retail Giants prepare for tough year
Well-known retail giants Home Depot and Walmart delivered a grim outlook for the future of retail spending in 2023.
Home Depot’s stock fell after the report, while Walmart’s stock essentially flatlined as investors digested what the news meant for the economy. Although both Home Depot and Walmart sell an assortment of goods, their earnings give us a glimpse of what is to come.
Walmart’s Chief Financial Officer Rainey said, “While the supply-chain issues have largely abated, prices are still high, and there is considerable pressure on the consumer.”
Last quarter, retail shopping showed signs of a slowdown in spending. As more companies release their earnings reports, further insights will be provided into different types of goods that are being impacted.
Walmart said it expects same-store sales for its U.S. business to rise by 2% or 2.5%, excluding fuel, in the fiscal year. Home Depot said it expects sales growth for the fiscal year to be roughly flat.
Target doubles Down on E-commerce
Target said Wednesday that it will spend $100 million to build a larger network of supply chain hubs, coined sortation centers, to speed up and lower the cost of delivering online orders.
Despite struggling with a glut of inventory and a noticeable pullback in sales, Target is betting on e-commerce growth to save the day in 2023.
Over roughly the past six years, Target has leaned into a strategy of “stores as hubs.” It has turned its approximately 1,950 stores into mini warehouses where employees help pick and pack the majority of the company’s online orders. Nearly 97% of its total sales were fulfilled by a store in the fiscal third quarter.
Up to 40% of packages that go through the new sortation centers and get delivered by Shipt arrive at customers’ doors the next day — and Target aims to get that number higher.
Retail Snippets.
Personalization: Networking and personalization to rule the retail industry in 2023.
Growing pains: Struggling Bed Bath & Beyond closing 150 more stores.
BNPL update: Apple Pay Later beta testing expands; monthly ‘buy now, pay later’ option also in the works.
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