Amazon ran, so Walmart could walk
One part of Walmart’s business that comes with tastier margins is its booming e-commerce division. As we charted earlier this year, Walmart's online business has been on fire, growing between 2019 and 2023 at a similar pace to that which e-commerce trailblazer Amazon achieved from 2007-2011.
That opens up new opportunities for Walmart, like advertising. Indeed, Walmart execs expect selling advertising on Walmart.com, or collecting fees from merchants that use its online marketplace, to make larger contributions to future profit growth than just selling more stuff.
That its online presence is now a source of optimism is certainly ironic, having grappled with online retailers for much of the last two decades. Indeed, following fierce price wars between Amazon and Walmart, like the one on books in the early 2000s, many expected Jeff Bezos's monolith to eat Walmart's lunch.
Although Amazon’s meteoric rise — surpassing Walmart as the more valuable company back in 2015 — has been remarkable, Walmart's core business has held up just fine. Indeed, even with the sharp drop on Friday, Walmart’s share price remains near its all-time peak, up 63% over the last 5 years.
Low prices, high costs
Whether stifling Mom-and-Pop stores in small towns, being accused of the poor treatment of animals in its supply chain, or just its general treatment of its workforce, Walmart hasn't gotten to its place at the top of the food chain without racking up a long list of controversies. The company's high staff turnover rate has been a particular focus, as has the company's anti-union practices, which some say make Walmart among the nation's most aggressive anti-union organizations.
Although it may feel like it's always been a permanent part of the American business landscape, Walmart is in some ways still young, having only been founded in 1962. It's also unique in that it remains majority-owned (~50%) by direct descendants of its founder, Sam Walton. The fortune has been passed down through the Walton generations — a family who won't be wanting for any material objects at the Thanksgiving table this year, with a collective net worth of some $200-250bn.
