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Wal-Mart E-Commerce Growth Won’t Include Grocery; Veterans Program Sees 13,000 Applicants In 10 Days

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Wal-Mart Stores Inc. of Bentonville continues to grow its efforts in e-commerce, but the retailer has no current plans to expand its domestic online operations for grocery.

Even as online shopping competitors like Amazon launch Internet grocery services, San Francisco and San Jose in California remain the only markets where Wal-Mart offers the service. Those two cities have been part of a pilot program since 2011 and remain the only options at this time, president and CEO of Global e-Commerce for Wal-Mart Neil Ashe said during a Q&A session with media in Rogers.

(More: Arkansas Business’ Chris Bahn is covering today’s meeting. Follow his tweets from the event at @CBahn. You can also watch a live webcast of the event here. Wal-Mart is posting photos from this week’s events on Flickr here.)

While there are no plans to grow the grocery delivery model, Ashe was quick to point out that Wal-Mart could operate on a larger scale if it wanted. Right now, though, demand isn’t there in the United States. Wal-Mart runs the Asda supermarket chain in England and has seen strong demand there.

“We’ve proven we know how to do it,” Ashe said. “We haven’t proven market density [in the U.S.]. … We have thousands of points for distribution across the country we can turn on if and when we decide that’s what customers want.”

Grocery delivery, like other forms of e-commerce, requires enough customer demand to make sending out delivery trucks feasible. Individual customers need larger orders and multiple individuals need to place orders.

Demand is strong in other areas of e-commerce, however. The retail giant is ramping up its global efforts online and has a stated goal of $9 billion in internet/mobile sales for the current fiscal year. Ashe pointed to the United States, United Kingdom, China and Latin America as four key markets.

Wal-Mart is working to expand its options available for online shoppers and has a team working on a global platform for web shoppers. A scan-and-go pilot program is ready for launch in 200 stores, according to senior vice president of mobile and digital Gibu Thomas.

Wal-Mart U.S. CEO Bill Simon said in a later session that the online growth and a plan to expand business in current markets would help the chain rebound from a poor first quarter. Wal-Mart continues to ramp up its Neighborhood Market operations and will open 80-100 of those primarily grocery-based stores this year. Simon said another 80-100 would open next year as well. 

“We can put a small store in the ground and through logistics and e-commerce they can operate and perform financially like a larger store,” Simon said. “When we do that we can tap markets and geographies that we’ve identified for growth.”

Serving Vets
Within the first 10 days of Wal-Mart’s initiative to hire veterans approximately 13,000 applications were submitted. Close to 3,000 applied on the first day of the program, which launched May 27.

Simon said the first batch of applicants led to 400 hires.

Wal-Mart has pledged to hire more than 100,000 veterans over the next five years. Veterans can choose to apply through “find a job now” or “find a career now” programs.

Kristin Oliver, executive vice president of people, said approximately two-thirds of the early applications have been submitted for the jobs program. Career applicants face a longer screening process because the positions are in management.

“We intend to flow them as quickly as we can,” Oliver said.

New hires and current employees who have served in the military will be identifiable in stores through a new badge.

Tough Times
Small businesses are very much a part of the customer base for Sam’s Club. Officials with the bulk retail operation recently completed a round of visits with key small business customers in some markets and found that owners are still battling economic struggles.

Todd Harbaugh, executive vice president of operations for Sam’s Club, recalled visiting a restaurant in Texas that was buying supplies each night based on the money it made during the lunch shift.

“They’re so tight on what they do that the sales they have for lunch, they use that money and come in afternoon to restock,” Harbaugh said. “Our business members are under so much pressure they are really living meal-to-meal.”

Despite customer struggles, revenue for Sam’s Club eclipsed $50 billion last year. That number, if broken out from Wal-Mart, would make Sam’s Club the eight largest retailer nationally. CEO Ros Brewer reiterated on Thursday that the goal is for Sam’s to be a $100 billion operation.

Brewer said Sam’s Club would open 15-20 new stores this year, a significant increase from previous years. Those new stores, increased member fees and the addition of “exciting” brands and products are expected to fuel growth.

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