Walmart Canada's e-commerce sales surge 229% amid the pandemic

Walmart Canada's e-commerce net sales grew 229 per cent in the most recent quarter, the strongest growth of the company's international markets, capping an unprecedented year for the world's largest retailer.

Net sales at Walmart Canada grew 8.6 per cent in the 13-week period ending Jan. 31, the company disclosed on Thursday. Comparable sales, a key metric in the retail industry, also jumped 8.6 per cent, thanks largely to strong sales in the food and online grocery categories.

Horacio Barbeito, president and chief executive of Walmart Canada, said that several investments deployed throughout the year helped boost the company's online sales.

"We deployed pickup capabilities in over 70 stores just in (the first quarter) to get to 300 stores so customers were able to order online and pick-up in store without leaving their cars. That was transformational," Barbeito said in an interview.

"Our marketplace also increased the number of third-party sellers, and we hired 4,500 people to serve and address the surge in online. It was investment in people, investment in tech and investment in capability that was key."

Walmart Canada – considered an essential retailer – has remained open through the pandemic lockdowns that hit many areas of the country through the holiday season, something that has drawn the ire of some business groups such as the Canadian Federation of Independent Business.

Walmart reported stronger-than-expected sales results on Thursday, driven by strong e-commerce growth. Overall online sales at Walmart increased 69 per cent in the quarter, blowing past a 35 per cent increase during the same time last year, but less than the 79 per cent surge seen in the the third quarter.

But shares of the company were down nearly 6 per cent as of 2 p.m. ET on Thursday, as the company forecast muted growth in 2021 in the low-single digits.

When it comes to Walmart Canada's performance for the next fiscal year, Barbeito said he is "cautiously optimistic" and that the company is preparing to handle what it expects to be a surge of pent-up demand for certain product categories, including outdoor living and fitness.

"Everybody bought a laptop or a tablet last year, and that's going to be a good performing category, but it's not going to be the surge that it was last year," he said. "But we will have opportunities to really go after other leisure categories that customers are looking for."

Over the next year, Walmart will also continue its plan to invest $3.5 billion to build two new distribution centres and renovate more than 150 existing stores. Barbeito said the company expects to spend $700 million in 2021 on the new distribution centres and will renovate 58 stores.

As part of the $3.5 billion investment, Walmart Canada introduced new infrastructure and e-commerce fees on suppliers, moves denounced by various food industry, farming and processing groups. In a joint statement, the associations called on the government to introduce a a grocery supply code of practice. Canada's federal, provincial and territorial agriculture ministers are studying the increased retailer fees on suppliers and will issue a report in July.

When asked about the government's decision to study the fees, Barbeito said the company respects the initiative.

"I think this is just a common world practice between the supply community and retailers, just like when suppliers see cost increases because of (the cost of) raw materials, infrastructure investment or brand repositioning," he said of the fees.