Walmart taking bruises from Amazon battle in fourth quarter

NEW YORK (AP) — Walmart is taking some bruises from its battle with online leader Amazon.

The world’s largest retailer reported a lower-thanexpected fourth-quarter profit and wrestled with slower e-commerce sales during the busiest time of the year, signs that underscore the company’s challenges in a fiercely competitive landscape.

The news, announced Tuesday, overshadowed the discounter’s better-thanexpected sales at its established stores and higher customer counts as online services linked to its fleet attract more shoppers.

Its shares slipped nearly 10 percent in afternoon trading, putting it on track for the biggest percentage drop since October 2015. Walmart was the largest percentage decliner in the Dow Jones industrial average, pushing down the benchmark index.

The mixed results raise concerns that Walmart’s push to narrow the gap between Amazon.com Inc. and itself may be losing steam, even as it makes huge investments in both its digital business and stores like lowering prices. These investments, however, are eating away profits. E-commerce sales growth in its U.S. business slowed to 23 percent during the fourth quarter, a sharp decline from 50 percent in the third quarter. Walmart blamed the bulk of the slowdown to the company’s lapping its acquisition of online retailer Jet.com a year earlier. But it also acknowledged its own mistakes — a surge of TVs, toys and electronics to its warehouses during the peak periods of the holiday season crowded out more basic items. Still, Walmart finished the year with more than 40 percent growth in online sales in the U.S., and it expects that online sales will be revived this year to hit that same pace.

Walmart and other retailers are looking at new ways to compete in light of swiftly changing shopping habits. The owner of Safeway and other grocery brands announced it was buying the drugstore chain Rite Aid as retailers continue to plunge deeper into health care. Albertsons Cos. executives said Tuesday that their purchase of Rite Aid’s more than 2,500 remaining stores will help the combined company become a “leader in food, health and wellness.”

Walmart itself is building fewer big stores and focusing on investments in its online business while beefing up benefits for its workers.

The nation’s largest private employer said last month that it would raise the starting salary for U.S. workers to $11 an hour, give a one-time cash bonus of up to $1,000 to eligible employees and expand its maternity and parental leave benefits. A number of U.S. corporations have announced employee bonuses and expanded benefits following drastic changes to the U.S. tax code.

But a hot economy has now forced employers to compete for workers who can be more choosy. The U.S reported this month that hourly pay rose in January from a year earlier at the fastest pace in eight years and the unemployment rate hovered at only 4.1 percent for the fourth consecutive month.

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