Walmart shines while local retailers struggle: A tale of two markets

You can also listen to this podcast on iono.fm here. ADVERTISEMENT CONTINUE READING BELOW Welcome to the Supernatural Stocks Podcast on Moneyweb with your host The Finance Ghost, your weekly fix of local and international news for investors and traders alike. These are the stories that really caught my eye in the past week.

The devil is always, always in the detail for retail. Small moves in gross margin can have a significant impact on bottom-line profits, especially at retailers with structurally lower profit margins. It’s interesting to note them pointing out that “these are not inflation-driven results” – a clear indication that there is momentum in volumes. In the latest quarter, Walmart managed sales growth of 5.7%. Across their product mix, inflation was only around 0.4%.

If it’s too old or the assortment is wrong, then the retailer is at risk of nasty markdowns and pressure on gross margin to try and clear it out and unlock working capital.

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