Four takeaways from Walmart’s Q1 earnings results

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The customer’s always journeying: Retail, like life, is about the journey—the customer journey, that is. In our State of Stores report, we dive into how retailers need to use every tool in their kit (including the POS) to meet the ever-expanding expectations of today’s shoppers. Read it here.

When the biggest retailer in the country opens its books, there are bound to be some interesting insights buried in there—some of which point toward wider trends in the retail industry.

Here are four takeaways from Walmart’s Q1 earnings:

Inflation ahead: While Walmart executives stated multiple times that Walmart will continue to compete on price, including putting into place 7,200 rollbacks, CFO John Rainey warned that “if the current elevated cost environment persists, we’d expect somewhat higher retail price inflation in Q2 and the second half of the year.” He added that inflation in Q1 was just over 1%, but as fuel prices increase and the supply of nitrogen and phosphates is constrained due to the situation in the Strait of Hormuz, inflation could trickle down to the fertilizer-dependent food category.

More and faster deliveries: Walmart is becoming a fast delivery machine, and its brick-and-mortar stores are at the center of the gains. There was a 45% increase in e-commerce deliveries fulfilled by stores in Q1, and 36% of them fell under the expedited delivery category, which includes orders delivered in under three hours. E-commerce sales were up 26% overall, and Walmart is attributing the increase to more customers using its fast delivery capabilities from its stores.

General merchandise: The general merchandise category saw its biggest share gains in five years, growing in the mid single digits on the strength of fashion and hardline categories as well as private brands. CEO John Furner said general merchandise is a global priority for the company, and that it outpaced food and consumables in its international business.

Third-party marketplace: Relatedly, the growing strength of Walmart’s third-party marketplace also contributed to the gains in general merchandise. Marketplace growth in apparel, home, and hardlines exceeded 40%, and overall sales on the platform grew 50% in Q1. Furner said Walmart is also extending services to these partners, including advertising and fulfillment tools to help grow their business.