Walmart Bypasses Supply Chain Crisis, Sees Revenues Rise
People wearing masks and gloves wait to enter a Walmart on April 17, 2020 in Uniondale, New York. The World Health Organization declared coronavirus (COVID-19) a global pandemic on March 11th. (Photo by Al Bello/Getty Images)
Al Bello/Getty Images

Walmart revealed that its sales grew significantly over the past three months as it successfully handled inflation and bypassed the supply chain crisis.

On Tuesday, the retail giant reported a 9.2% increase in sales between its third quarters in 2020 and 2021. Total revenue likewise increased 4.3% to $140.5 billion.

“Our momentum continues with strong sales and profit growth globally. Our omni-channel focus is pushing digital penetration to record levels,” explained Walmart chief executive Doug McMillon. “We gained market share in grocery in the U.S., and more customers and members are returning to our stores and clubs around the world. Looking ahead, we have the people, the products, and the prices to deliver a great holiday season for our customers and members.”

The New York Times explained that Walmart has been able to bypass supply chain bottlenecks challenging its competitors:

In recent months, the company began chartering its own ships to circumnavigate the shipping congestion and has been pushing to hire 150,000 additional workers ahead of the holidays. The company said on Tuesday that it was managing supply chain issues by rerouting products to less congested ports and extending overnight hours to help unload cargo…

Some of its competitors have reported problems with empty shelves and spotty inventory, but Walmart noted that its inventory in the United States was 11.5 percent higher heading into the holiday season.

Though Walmart has been able to mitigate them, supply chain issues — driven by renewed lockdowns in developing Asian economies and labor shortages in the United States — are indeed threatening firms attempting to stock shelves and move inventory.

“Some of these companies actually will not be able to ship units. And if they can’t ship units, they might disappoint on their earnings,” explained investor Paul Meeks to CNBC. “Their stocks are so expensive that they could go down. Not go down a bit, they could go down a lot.”

“It’s a bummer and unfortunately, there’s not any relief,” he added. “It’ll also hit the top and bottom lines of some of these vendors that are selling those hot Christmas products.”

Meeks believes that the bottlenecks may last until 2023. As of November 10, a record 111 vessels were waiting to unload merchandise in Los Angeles and Long Beach ports.

Chief financial officer Brett Biggs said during a call with analysts that sales were aided by government stimulus checks and higher grocery prices. Walmart, however, is not the only firm to see higher sales as a result of inflation. On Tuesday, the United States Census Bureau announced that American retail and food services sales rose by 1.7% between September and October — signaling that consumers are willing to absorb inflation as the economy continues to recover from COVID-19 and the lockdown-induced recession.

Goya Foods CEO Bob Unanue likewise revealed that his company would hike prices to deal with higher costs, which are in part driven by the supply chain issues.

“We bring products like coconut water from Thailand [and] from Vietnam and a container with about 1300 cases of coconut water in it used to cost about $1800, $1.40 a case; it’s gone up to $20,000 to get on a container ship if you can,” he told Fox Business. 

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