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Is WalMart In Terminal Decline? This Chart Is One More Reason To Think So

We’ve spilled quite a bit of digital ink documenting WalMart’s trials and travails since the world’s largest retailer moved last year to implement an across-the-board wage hike for its lowest-paid employees.

That decision led directly to a series of unfortunate events including a move to squeeze extra savings out of suppliers and an effort to recoup the money spent on the wage hikes by - you guessed it - firing people, including dozens at the home office in Bentonville.

Things briefly calmed down after the retailer kitchen-sinked it on an October guidance cut which triggered the largest decline in the company’s stock price in 17 years, but it all took a further turn for the worst last month when WalMart announced it would be closing 269 stores and laying off some 16,000 people.

Accompanying that announcement was the revelation that WalMart would no longer be building two super centers in Washington DC, where officials responded angrily that the city had been “shafted.”

“As part of today’s action, the company will close 154 locations in the U.S., including the company’s 102 smallest format stores, Walmart Express, which had been in pilot since 2011,” the company said on January 15. “Walmart instead will focus on strengthening Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding Pickup services for customers.”

Right. “Growing the e-commerce business.” Because increasingly, shopping online is consumers’ preferred option.

In a testament to how the ground is shifting beneath the Bentonville behemoth’s feet when it comes to e-commerce, we bring you the following brief commentary and graphic from Wells Fargo, who shows that when it comes to retail sales growth in the US, WalMart is, well, damn near dead.

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From Wells

Amazon’s share gains have continued to massively accelerate. We estimate Amazon captured more than 51% of all applicable retail growth dollars in the U.S. during Q4, an acceleration of more than 10pts from just last quarter. We now estimate Amazon captured 42% of all applicable retail growth dollars for all of 2015, nearly double the 22% it captured in 2014. Our calculations are based on our estimate for Amazon’s North America Gross Merchandise Volume (GMV) and the US Census estimates for retail sales in relevant retail categories (excluding motor vehicle dealers, gas stations and fuel, and food and beverage). Charts on P. 2 illustrate Amazon’s growth relative to retail and to Walmart, which we estimate will capture less than 7% of all applicable retail growth dollars in Q4, and approximately 9% of the growth in 2015 (note we use our estimate for Walmart’s U.S. sales in Q4 as the company has not yet reported).

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As for what the future holds for Sam Walton's brainchild, we looked into our crystal ball and saw the following:

On the bright side for WalMart stock holders, the equity may get a bid this year from a rotation out of growth and into value as global markets look set to remain mired in turmoil for the foreseeable future.