BENTONVILLE, ARK. — CE sales slumped for Walmart and sister chain Sam’s Club during the company’s fiscal fourth quarter, which included the critical holiday and Super Bowl selling periods.
At the company’s namesake discount stores, CE comp sales declined by high single digits for the three months, ended Jan. 31. Greg Foran, who took the helm of Walmart U.S. last July as president/CEO, acknowledged that the chain “remained challenged” in tech due to myriad macro-factors, including industry contraction and price deflation.
Also contributing to what he described as “persistent declines” in Walmart’s home entertainment business is the shift from physical to digital media, while fewer new titles for Xbox One and PlayStation 4, and tough comparisons due to the anniversary of their release, added to the challenging quarter.
In addition, the chain is still being impacted by wireless carriers’ switch to installment payment plans for new phones. Although Walmart began integrating the programs into its systems last fall, “we’re still ramping up this service as we reacquaint customers with our ability to serve them in this category,” Foran said.
He added that softness in CE has also taken a bite out of Walmart’s online business, particularly for ship-tohome orders.
The CE situation was similar at Sam’s Club, where president/CEO Rosalind Brewer cited continued underperformance in tech. Category comps slipped by the mid-single digits, which nonetheless represented an improvement over the preceding quarter. She said the gains reflected the warehouse club’s introduction of 4K UHD TVs, an expanded assortment of wearables, and “a strong value proposition” on the iPhone 6 and 6 Plus.
Brewer added that the chain’s CE merchants are looking to build sales momentum by “rebalancing the portfolio, which involves reallocating resources towards higher growth, higher excitement categories.
“We need to make larger, faster strides,” she said.