[Asia Economy Reporter Myung-hwan Lee] Walmart, a major discount retailer in the United States, is expected to show solid growth as it diversifies its business, according to securities industry forecasts.
Korea Investment & Securities analyzed on the 3rd that the stock returns of U.S. offline retailers, including Walmart, were favorable last month. While the U.S. Nasdaq and Dow Industrial indices rose by 5.1% and 4.2% respectively last month, Walmart recorded a 9.5% return. The reason for the higher return compared to the U.S. stock market is explained by the rise in consumer prices, which increased the investment attractiveness of discount store companies. Walmart is considered the company that responded most actively to the logistics crisis among U.S. retail companies.
The firm also pointed out that Walmart’s recent efforts to expand its business areas and pursue changes are positive. Walmart plans to hire about 50,000 new employees in the U.S. by the end of this month to reinforce offline store staff and strengthen new businesses such as advertising and fulfillment. This year, Walmart plans to expand its delivery service, "Walmart In Home," from the current 6 million households in the U.S. to 30 million households. Recently, Walmart has been offering a 6-month premium service free of charge in partnership with the music streaming platform Spotify to customers using its paid membership, "Walmart Plus." Korea Investment & Securities expects Walmart to show solid growth both online and offline this year by strengthening the competitiveness of its paid membership.
Korea Investment & Securities evaluated Walmart as the most suitable investment during periods of rising prices. As the U.S. online food market began to grow significantly due to COVID-19, Walmart is considered the most advantageous because it has the largest number of offline stores that can be used as delivery hubs in the U.S. Researcher Myung-joo Kim of Korea Investment & Securities advised, "With the expected strengthening of Walmart’s paid membership competitiveness, it will show solid growth both online and offline," adding, "We recommend it from a positive perspective during stock price corrections."
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