Walmart’s ‘Perfect Storm’

It has undeniably been a bit of a rough sledding for Walmart of late, with many predicting the Walmart era is essentially coming to an end. Walmart, according to the collective editorial might of many corners of the Internet, is heading rapidly toward being a relic of a previous era in commerce, when big stores, ubiquitous physical locations and “always low prices,” were what it took to win the day. The general concern is that Walmart just got on board with the digital revolution too late — and its customer and sales bleed is the natural outcome.

Not all views, however, are so entirely pessimistic, as Moody’s Vice President Charles O’Shea wrote in a recent report for investors.

“Walmart is facing a perfect storm when it comes to the headwinds affecting top-line growth,” O’Shea said. “We continue to believe that the company’s multichannel strategy is sound, and the near-term investments will generate increased profits over the medium to long term.”

Moody’s notes in its report — rather cheekily titled “Walmart Stores, Inc.: Rome Wasn’t Built In A Day” — that the firm has made essentially all the right investments in omnichannel and digital commerce, and its firm belief is that these results are going to start to yield some impressive fruits in the medium to short term.

“Walmart is morphing into a multichannel retailer and taking an upfront financial hit in the process,” O’Shea said. “These investments are crucial for any brick-and-mortar retailer that wants to remain competitive, and will position Walmart for long-term growth.”