Home Economics Walmart, Amazon Triumph as targets, Home Depot and Lowe’s Stumble

Walmart, Amazon Triumph as targets, Home Depot and Lowe’s Stumble

Walmart, Amazon Triumph as targets, Home Depot and Lowe's Stumble

The earnings season for the first quarter of 2023 is in full swing, leaving behind a mixed bag of results from the US retail giants. Industry titans AmazonAMZN and WalmartWMT raced ahead, while TargetTGT, Home Depot and Lowe’s ran into some stumbling blocks. All this against the backdrop of a retail industry trying to gain a foothold amid changing consumer behavior and a return to pre-pandemic trends.

According to the US Department of Commerce, retail sales grew 3.6% and e-commerce sales grew 8% in the first quarter of 2023 compared to the same quarter in 2022. A return to the norms of a decade before the pandemic, when the retail growing at 4% and e-commerce at 14.9% per year. This comes on the heels of an unusual year, from March 2021 through December 2022, when brick-and-mortar retail unexpectedly caught up with or even exceeded e-commerce sales due to unique pandemic-driven consumer behavior.

is projected on a screen during a press conference on September 6, 2012 in Santa Monica, California. Amazon has unveiled the Kindle Paperwhite and the Kindle Fire HD in 7 and 8.9-inch sizes. (Photo by David McNew/Getty Images)Getty Images

Amazon, the e-commerce giant, showed no signs of slowing down. Despite increasing competition, Amazon’s US revenue grew an impressive 11% in the first quarter compared to Q1 2022. Citi Research estimates that Amazon’s gross commercial value is likely to have increased by 12% compared to the last year, better than the industry average of 8% for e-commerce.

in Burbank, California on August 15, 2022. – Walmart, the largest retailer in the United States, will report second quarter results on August 16, 2022. (Photo by Robyn Beck/AFP) (Photo by ROBYN BECK/AFP via Getty Images)AFP via Getty Images

Walmart followed suit and was high on its Q1 earnings. Same-store sales in the US were up 7.4% year over year, more than twice the industry average. More impressively, e-commerce sales increased by a whopping 27%, more than three times the industry average.

Washington, DC, on May 18, 2022. – With European markets also pulling back, major US indices took signals from Target, the North American-focused big-box retailer, which plunged about 25 percent after earnings fell despite higher sales exceeded expectations. (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)AFP via Getty Images

However, while Amazon and Walmart celebrated their victories, others found it difficult. Target’s first-quarter earnings showed a disappointing 0.7% growth in comparable store sales and a 3.4% decline in comparable digital sales. The company’s bleak outlook for 2023, with an expectation of a single-digit decline to a single-digit increase, reflects the US consumer’s struggles.

on Feb. 18, 2019. — The home improvement retail giant offered a weaker-than-expected outlook for fiscal 2019 when it reported its fourth-quarter results on Feb. 26, 2019, weakening shares in early trading. Dow member Home Depot lost 3.2 percent as predicted slightly lower sales growth in 2019 compared to last year. (Photo by Robyn Beck / AFP) (Photo credit should read ROBYN BECK/AFP via Getty Images)AFP via Getty Images

Home Depot’s revenues in the first quarter were equally daunting. The company posted its biggest revenue miss in two decades with a 4.6% decline in same-store sales and a 2.9% decline in digital sales compared to the first quarter of 2022. Home Depot now expects the sales and comparable sales will fall between 2% and 5%. % for the fiscal year.

logo printed on a shopping cart in Dublin, California, Nov. 27, 2020. (Photo by Smith Collection/Gado/Getty Images)Gado via Getty Images

Finally, despite beating sales expectations, Lowe’s followed a similar trajectory with a 4.3% decline in comparable store sales. While digital sales grew 6% compared to a year ago, Lowe’s also lowered its forecasts, expecting sales to fall 2% to 4% this fiscal year.

All retailers are struggling with a noticeable shift in consumer spending patterns. As discretionary spending declines, consumers prioritize needs over wants. They opt for fewer and smaller purchases and show a renewed focus on value. However, it’s not all doom and gloom. This consumer behavior gives retailers the opportunity to reassess, innovate and adapt to meet changing consumer demands. Indeed, the coming quarters will be a test of resilience, creativity and agility for these retail giants. The battle for the American consumer’s wallet continues.

follow me up Twitter or LinkedIn. Checking out my website.

I am a fourth generation retailer, who has been helping brands and retailers navigate digital disruption for 30 years. I am the Chief Commerce Strategy Officer at Publicis Groupe. I am the chairman of the board of shop.org (the digital retail arm of the National Retail Federation). I host a top-rated e-commerce podcast, “The Jason & Scot Show,” and was included in the National Retail Federation’s “The List” of people shaping the future of retail in 2017.

read moreRead less

Previous articleNew date from the Banking and Payments Federation of Ireland confirms new buyers will be saddled with heavier loans
Next articleOn the move: The latest jobs news and promotions in Wales