Overview of Walmart Company - Free Essay Example

Walmart Company is a multinational retail company that deals with a variety of products. Walmart Retail Company has a variety of stores that include hypermarkets, departmental chain stores as well as grocery stores. The company has both physical and online stores in more than thirty-seven countries across the globe. Walmart Retail Company was founded by Sam Walton in the 1962 and it was earlier known as the Walton store. Walmart has expanded over the years and so has been its revenue as well as assets. Additionally, Walmart company is considered as the largest private employer in the world, where it employees over 2.3 million people in the US. The company has been raising revenue from the hypermarkets and departmental stores. However, most of the company's revenue is raised from the grocery stores. In fact, Walmart retail company grocery stores are the largest in the US grocery markets and they attract many customers.

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Since Walmart has several products and brands I have chosen to discuss the Walmart grocery stores. As stated earlier the Walmart grocery stores make the largest sales volume recorded by Walmart Company. The Walmart grocery stores deal with vegetable brands, fruits cereals, and other goods that are mainly used in the kitchen or foodstuffs. In order to remain competitive in the market the Walmart grocery stores highly differentiate its products in order to suit the market demand. For instance, in January 2017 Walmart grocery stores launched Skipcart, Point Pickup Roadie, and AxleHire products to facilitate the online delivery of the goodies from the stores. These delivery services have been availed to more than 800 stores and the company plans to extend the service to another 800 stores in 2020. The revenue of Walmart in the 2018 fiscal year was $500.3 billion while the total revenue raised in 2019 first quarter was $514.4 billion. The revenue from the grocery stores had increased by 3.6% which was attributed by the introduction of the Grocery Pickup services.

The macroeconomic variables applied are GDP growth, inflation and unemployment and they affect the supply and demand of the Walmart Company (Adrian, Boyarchenko & Gianno, 2019). These macroeconomic variables have been proven to dominantly exist in the US economy and affect the transactions of companies as well as their revenues. For instance, the GDP growth rate of the economy determines a country's economic performance. If the GDP growth rate of a country is high it shows that the country has a good economic performance and investors are; likely to make a profit. On the other hand, slow GDP growth rate means that the country's economy is performing poorly. For instance, in 2018 and the first quarter of 2019 the US GDP growth has been tremendous. The highest rate was at 4.2 in 2018 and 3.2 in 2019 ("United States GDP Growth Rate | 2019 | Data | Chart | Calendar | Forecast", 2019).

Inflation also affects the performance and revenues of companies such as Walmart. The inflation rate of the U.S was 1.9% in 2018 and it is projected to fall to 1.8% in 2019 (Amadeo, 2019). The inflation rates of the two consecutive years have been associated with the expansion of the economy. This means that Walmart grocery stores are likely to make more revenue because the economy is expanding hence more consumption of their products.

The US economy experienced a fall in the unemployment rate in 2018. for instance, in 2018 the unemployment rate stood at 3.9% in December 2018 which had declined from 4.1% in December 2017 ("Official unemployment rate was 3.9 percent in December 2018; U-6 was 7.6 percent: The Economics Daily: U.S. Bureau of Labor Statistics", 2019). The decline in the unemployment rate means an increase in the number of household with money to spend. Reduced unemployment results in increased consumption in an economy. Therefore reduced unemployment rates affects revenues of Walmart grocery stores positive.in other words it contributed to an increase in revenue of the store.

References

Adrian, T., Boyarchenko, N., & Giannone, D. (2019). Vulnerable growth. American Economic Review, 109(4), 1263-89.

Amadeo, K. (2019). US Inflation Rate by Year from 1929 to 2020. Retrieved from https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093Official unemployment rate was 3.9 percent in December 2018; U-6 was 7.6 percent: The Economics Daily: U.S. Bureau of Labor Statistics. (2019). Retrieved from https://www.bls.gov/opub/ted/2019/official-unemployment-rate-was-3-point-9-percent-in-december-2018-u-6-was-7-point-6-percent.htm

United States GDP Growth Rate | 2019 | Data | Chart | Calendar | Forecast. (2019). Retrieved from https://tradingeconomics.com/united-states/gdp-growth