Wiki source code of Walmart

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4
5 = Overview =
6
7 Walmart Inc. (WMT) helps people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce. Through innovation, Walmart is striving to create a customer-centric experience that seamlessly integrates its eCommerce and retail stores in an omni-channel offering that saves time for its customers. Each week, the company serve nearly 270 million customers who visit its more than 11,700 stores and numerous eCommerce websites under 65 banners in 28 countries.{{footnote}}https://fintel.io/doc/sec-wmt-walmart-10k-2018-march-30-17944{{/footnote}}
8
9 The company's strategy is to lead on price, invest to differentiate on access, be competitive on assortment and deliver a great experience. Leading on price is designed to earn the trust of its customers every day by providing a broad assortment of quality merchandise and services at everyday low prices ("EDLP"). EDLP is its pricing philosophy under which the company price items at a low price every day so its customers trust that its prices will not change under frequent promotional activity. Price leadership is core to who Walmart is. Everyday low cost ("EDLC") is its commitment to control expenses so those cost savings can be passed along to its customers. The company's omni-channel presence provides customers access to its broad assortment anytime and anywhere. The company strive to give its customers and members a great digital and physical shopping experience.
10
11 The company's operations comprise three reportable segments: Walmart U.S., Walmart International and Sam's Club. The company's fiscal year ends on January 31 for its United States ("U.S.") and Canadian operations. The company consolidate all other operations generally using a one-month lag and on a calendar year basis. The company's discussion is as of and for the fiscal years ended January 31, 2018 ("fiscal 2018"), January 31, 2017 ("fiscal 2017") and January 31, 2016 ("fiscal 2016"). During fiscal 2018, the company generated total revenues of $500.3 billion, which was primarily comprised of net sales of $495.8 billion.
12
13 The company maintain its principal offices at 702 S.W. 8th Street, Bentonville, Arkansas 72716, USA. The company's common stock trades on the New York Stock Exchange under the symbol "WMT." The Development of The company's Company
14
15 Although Walmart was incorporated in Delaware in October 1969, the businesses conducted by its founders began in 1945 when Sam M. Walton opened a franchise Ben Franklin variety store in Newport, Arkansas. In 1946, his brother, James L. Walton, opened a similar store in Versailles, Missouri. Until 1962, its founders' business was devoted entirely to the operation of variety stores. In that year, the first Wal-Mart Discount City, which was a discount store, opened in Rogers, Arkansas. In 1983, the company opened its first Sam's Club, and in 1988, the company opened its first supercenter. In 1998, the company opened its first Neighborhood Market.
16
17 In 1991, the company began its first international initiative when the company entered into a joint venture in Mexico. Since then, its international presence has expanded and, as of January 31, 2018, its Walmart International segment conducted business in 27 countries.
18
19 In 2000, the company began its first eCommerce initiative by creating walmart.com. That same year, the company also created samsclub.com. Since then, its digital presence has continued to grow. In 2007, walmart.com launched its Site to Store service, enabling customers to make a purchase online and pick up merchandise in stores. In 2016, the company acquired jet.com in the U.S. and formed a strategic alliance with JD.com in China. Subsequent to the jet.com purchase, Walmart has acquired several other U.S. eCommerce entities. In 2017, walmart.com launched free two-day shipping on more than 2 million items and the company created Store No 8, a tech incubator with a focus to drive commerce forward. These eCommerce efforts have led to omni-channel offerings in many markets, including over 1,100 "Online Grocery" pickup locations in the U.S. Information About The company's Segments
20
21 The Company is engaged in the operation of retail, wholesale and other units, as well as eCommerce websites, located throughout the U.S., Africa, Argentina, Brazil, Canada, Central America, Chile, China, India, Japan, Mexico and the United Kingdom. The Company's operations are conducted in three reportable segments: Walmart U.S., Walmart International and Sam's Club. The Company defines its segments as those operations whose results the chief operating decision maker ("CODM") regularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its segments. It is impractical to segregate and identify revenues for each of these individual products and services.
22
23 Walmart U.S. is its largest segment and operates retail stores in all 50 states in the U.S., Washington D.C. and Puerto Rico, with three primary store formats, as well as eCommerce. Walmart U.S. generated approximately 64% of its net sales in fiscal 2018, and of its three segments, Walmart U.S. is the largest and has historically had the highest gross profit as a percentage of net sales ("gross profit rate"). In addition, Walmart U.S. has historically contributed the greatest amount to the Company's net sales and operating income.
24
25 Walmart International consists of operations in 27 countries outside of the U.S. and is divided into three major categories: retail, wholesale and other. These categories consist of many formats, including: supercenters, supermarkets, hypermarkets, warehouse clubs (including Sam's Clubs) and cash & carry, as well as eCommerce. Walmart International generated approximately 24% of its fiscal 2018 net sales. The overall gross profit rate for Walmart International is lower than that of Walmart U.S. primarily because of its merchandise mix. Walmart International is its second largest segment.
26
27 Sam's Club consists of membership-only warehouse clubs and operates in 44 states in the U.S. and in Puerto Rico, as well as eCommerce. Sam's Club accounted for approximately 12% of its fiscal 2018 net sales. As a membership-only warehouse club, membership income is a significant component of the segment's operating income. Sam's Club operates with a lower gross profit rate and lower operating expenses as a percentage of net sales than its other segments.
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29 The Company measures the results of its segments using, among other measures, each segment's net sales and operating income, which includes certain corporate overhead allocations. From time to time, the company revise the measurement of each segment's operating income, including any corporate overhead allocations, as determined by the information regularly reviewed by its CODM. When the measurement of a segment changes, previous period amounts and balances are reclassified to be comparable to the current period's presentation.
30
31 == Walmart U.S. Segment ==
32
33 The Walmart U.S. segment is a mass merchandiser of consumer products, operating under the "Walmart," "Wal-Mart" and "Walmart Neighborhood Market" brands, as well as walmart.com and other eCommerce brands. The Walmart U.S. segment had net sales of $318.5 billion, $307.8 billion and $298.4 billion for fiscal 2018, 2017 and 2016, respectively. During the most recent fiscal year, no single unit accounted for as much as 1% of total Company consolidated net sales.
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35 Physical. Walmart U.S. operates retail stores in the U.S., including in all 50 states, Washington D.C. and Puerto Rico, with supercenters in 49 states, Washington D.C. and Puerto Rico, discount stores in 41 states and Puerto Rico and Neighborhood Markets and other small store formats in 36 states, Washington D.C. and Puerto Rico. The following table provides square footage details on each of its formats as of January 31, 2018:
36
37 |= |=Minimum Square Feet|=Maximum Square Feet|=Average Square Feet
38 |Supercenters (general merchandise and grocery)|69000|260000|178000
39 |Discount stores (general merchandise and limited grocery)|30000|206000|105000
40 |Neighborhood Markets(1) (grocery)|28000|65000|42000
41
42 The following table provides the retail unit count and retail square feet by format for the fiscal years shown:
43
44 |= |=Supercenters|= |= |= |= |=Discount Stores|= |= |= |=.
45 |Fiscal Year|Opened|Closed|Conversions|Total|Square Feet|Opened|Closed|Conversions|Total|Square Feet
46 | | | | | | | | | | |
47 |Balance forward| | | |3158|570409| | | |561|59098
48 |2014|72|—|58|3288|589858|4|—|-57|508|53496
49 |2015|79|—|40|3407|607415|2|—|-40|470|49327
50 |2016|55|-16|19|3465|616428|—|-9|-19|442|45991
51 |2017|38|-2|21|3522|625930|—|-6|-21|415|43347
52 |2018|30|—|9|3561|632479|—|-6|-9|400|41926
53 | | | | | | | | | | |
54 | |Neighborhood Markets and Other Small Formats| | | | |Total Segment| | | |
55 |Fiscal Year|Opened|Closed|Conversions|Total|Square Feet| |Opened|Closed|Total|Square Feet
56 | | | | | | | | | | |
57 |Balance forward| | | |286|11226| | | |4005|640733
58 |2014|122|—|-1|407|15778| |198|—|4203|659132
59 |2015|235|-3|—|639|23370| |316|-3|4516|680112
60 |2016|161|-133|—|667|27228| |216|-158|4574|689647
61 |2017|73|-5|—|735|30012| |111|-13|4672|699289
62 |2018|85|-20|—|800|30111| |115|-26|4761|704516
63
64 Digital. Walmart U.S. provides its customers access to a broad assortment of merchandise, including products not found in its physical stores, and services online through its eCommerce family of brands' websites and third party retail partnership channels, as well as through related mobile commerce and voice-activated commerce applications. The company's eCommerce family of brands includes walmart.com, jet.com, hayneedle.com, shoes.com, moosejaw.com, modcloth.com and bonobos.com. Walmart.com offers access to nearly 75 million SKUs, including those carried on Marketplace, a feature of the website that permits third parties to sell merchandise on walmart.com. Walmart.com is also integrated with its physical stores through services like "Walmart Pickup," "Pickup Today" and in over 1,100 "Online Grocery" pickup locations to provide an omni-channel offering to its customers. Walmart U.S. also offers access to digital content and services including Vudu.
65
66 Merchandise. Walmart U.S. does business in three strategic merchandise units, listed below, across several store formats including supercenters, discount stores, Neighborhood Markets and other small store formats, as well as on its eCommerce websites.
67
68 * Grocery consists of a full line of grocery items, including meat, produce, natural & organics, deli & bakery, dairy, frozen foods, alcoholic and nonalcoholic beverages, floral and dry grocery, as well as consumables such as health and beauty aids, baby products, household chemicals, paper goods and pet supplies;
69 * Health and wellness includes pharmacy, optical services, clinical services, and over-the-counter drugs and other medical products;
70
71 //General merchandise includes~://
72
73 * Entertainment (e.g., electronics, cameras and supplies, photo processing services, wireless, movies, music, video games and books);
74 * Hardlines (e.g., stationery, automotive, hardware and paint, sporting goods, outdoor living and horticulture);
75 * Apparel (e.g., apparel for women, girls, men, boys and infants, as well as shoes, jewelry and accessories); and
76 * Home/Seasonal (e.g., home furnishings, housewares and small appliances, bedding, home decor, toys, fabrics and crafts and seasonal merchandise).
77
78 Walmart U.S. also offers fuel and financial services and related products, including money orders, prepaid cards, wire transfers, money transfers, check cashing and bill payment. These services total less than 1% of annual net sales.
79
80 Brand name merchandise represents a significant portion of the merchandise sold in Walmart U.S. The company also market lines of merchandise under its private-label store brands, including: "Adventure Force," "AutoDrive," "BlackWeb," "Equate," "Everstart," "Faded Glory," "George," "Great Value," "Holiday Time," "Hyper Tough," "Kid Connection," "Mainstays," "Marketside," "My Life As," "No Boundaries," "Ol' Roy," "Onn," "Ozark Trail," "Parent's Choice," "Prima Della," "Pure Balance," "Sam's Choice," "Special Kitty," "Spring Valley," "Terra & Sky," "Time and Tru," "Way to Celebrate" and "Wonder Nation." The Company also markets lines of merchandise under licensed brands, some of which include: "Better Homes & Gardens," "Farberware," "Russell" and "SwissTech."
81
82 The percentage of strategic merchandise unit net sales for Walmart U.S., including online sales, was as follows for fiscal 2018, 2017 and 2016:
83
84 |= |=Fiscal Years Ended January 31,|= |=.
85 |STRATEGIC MERCHANDISE UNITS|2018|2017|2016
86 |Grocery|56%|56%|56%
87 |Health and wellness|11%|11%|11%
88 |General merchandise|33%|33%|33%
89 |Total|100%|100%|100%
90
91 Periodically, revisions are made to the categorization of the components comprising its strategic merchandise units. When revisions are made, the previous periods' presentation is adjusted to maintain comparability.
92
93 Operations. Many supercenters, discount stores and Neighborhood Markets are open 24 hours each day. A variety of payment methods are accepted at its stores and through its eCommerce websites and mobile commerce applications.
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95 Seasonal Aspects of Operations. Walmart U.S.'s business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as different weather patterns. Historically, its highest sales volume and segment operating income have occurred in the fiscal quarter ending January 31.
96
97 Competition. Walmart U.S. competes with both physical retailers operating discount, department, retail and wholesale grocers, drug, dollar, variety and specialty stores, supermarkets, hypermarkets and supercenter-type stores, and digital retailers, as well as catalog businesses. The company also compete with others for desirable sites for new or relocated retail units.
98
99 The company's ability to develop, open and operate units at the right locations and to deliver a customer-centric omni-channel experience largely determines its competitive position within the retail industry. The company employ many programs designed to meet competitive pressures within its industry. These programs include the following:
100
101 * EDLP: its pricing philosophy under which the company price items at a low price every day so its customers trust that its prices will not change under frequent promotional activity;
102 * EDLC: everyday low cost is its commitment to control expenses so its cost savings can be passed along to its customers;
103 * Rollbacks: its commitment to pass cost savings on to the customer by lowering prices on selected goods;
104 * Savings Catcher, Save Even More and Ad Match: strategies to meet or be below a competitor's advertised price;
105 * Walmart Pickup: customer places order online and picks it up for free from a store. The merchandise is fulfilled through its distribution facilities;
106 * Pickup Today: customer places order online and picks it up at a store within four hours for free. The order is fulfilled through existing store inventory;
107 * Online Grocery: customer places grocery order online and has it delivered to home or picks it up at one of its participating stores or remote locations; and
108 * Money Back Guarantee: its commitment to ensure the quality and freshness of the fruits and vegetables in its stores by offering its customers a 100 percent money-back guarantee if they are not satisfied.
109
110 The company offer a broad assortment of merchandise that provides one-stop shopping, in-stock levels that give its customers confidence that the company will have the products they need and operating hours that allow customers to shop at their convenience. In addition, its eCommerce capabilities, including omni-channel transactions that involve both an eCommerce platform and a physical format, are important factors in its competition with other retailers.
111
112 Distribution. For fiscal 2018, approximately 78% of Walmart U.S.'s purchases of store merchandise were shipped through its 157 distribution facilities, which are located strategically throughout the U.S. The remaining merchandise the company purchased was shipped directly from suppliers. General merchandise and dry grocery merchandise is transported primarily through the segment's private truck fleet; however, the company contract with common carriers to transport the majority of its perishable grocery merchandise.
113
114 The company ship merchandise purchased by customers on its eCommerce platforms by a number of methods from multiple locations including from its 30 dedicated eCommerce fulfillment centers.
115
116 The following table provides further details of its distribution facilities, including return facilities and dedicated eCommerce fulfillment centers, as of January 31, 2018:
117
118 |= |=Owned and Operated|=Owned and Third Party Operated|=Leased and Operated|=Third Party Owned and Operated|=Total
119 |Walmart U.S. distribution facilities|103|2|23|29|157
120
121 == Walmart International Segment ==
122
123 The Walmart International segment consists of operations in 27 countries outside of the U.S. and includes numerous formats divided into three major categories: retail, wholesale and other. These categories, including eCommerce, consist of many formats, including: supercenters, supermarkets, hypermarkets, warehouse clubs (including Sam's Clubs) and cash & carry. The segment's net sales for fiscal 2018, 2017 and 2016, were $118.1 billion, $116.1 billion and $123.4 billion, respectively, which have been impacted by currency exchange rate fluctuations. During the most recent fiscal year, no single unit accounted for as much as 1% of total Company net sales.
124
125 Physical. Walmart International includes physical stores operated by: its wholly-owned subsidiaries operating in Argentina, Brazil, Canada, Chile, China, India, Japan and the United Kingdom; and its majority-owned subsidiaries operating in Africa (which includes Botswana, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, South Africa, Swaziland, Tanzania, Uganda and Zambia), Central America (which includes Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua) and Mexico.
126
127 Generally, retail units range in size from 8,900 square feet to 186,000 square feet. The company's wholesale stores generally range in size from 35,000 square feet to 185,000 square feet. Other, which includes drugstores and convenience stores operating under various banners in Brazil, Mexico and the United Kingdom, range in size up to 2,400 square feet. Also, on a limited basis, Walmart International operates financial institutions that provide consumer credit.
128
129 The following table provides the retail unit count and retail square feet for the fiscal years shown:
130
131 |= |=Africa|= |= |=Argentina|= |= |=Brazil|= |= |=Canada|= |= |=Central|= |= |=Chile|=.
132 |Fiscal Year|Unit Count|Square Feet| |Unit|Square| |Unit|Square| |Unit|Square| |Unit|Square| |Unit|Square
133 |Balance forward|377|19775| |94|7531| |558|32494| |379|48354| |642|9873| |329|12671
134 |2014|379|20513| |104|8062| |556|32501| |389|49914| |661|10427| |380|13697
135 |2015|396|21223| |105|8119| |557|33028| |394|50927| |690|11094| |404|14762
136 |2016|408|21869| |108|8280| |499|30675| |400|51784| |709|11410| |395|15407
137 |2017|412|22542| |107|8264| |498|30642| |410|53088| |731|11770| |363|15260
138 |2018|424|23134| |106|8305| |465|29824| |410|53082| |778|12448| |378|15990
139
140 |= |=China|= |= |=India|= |= |=Japan|= |= |=Mexico(3)|= |= |=United|= |= |=Total Segment|=.
141 |Fiscal Year|Unit|Square| |Unit|Square| |Unit|Square| |Unit|Square| |Unit|Square| |Unit|Square
142 |Balance forward|393|65801| |20|1083| |438|24448| |1988|88833| |565|34810| |5783|345673
143 |2014|405|67205| |20|1083| |438|24489| |2199|94900| |576|35416| |6107|358207
144 |2015|411|68269| |20|1083| |431|24429| |2290|98419| |592|36277| |6290|367630
145 |2016|432|71724| |21|1146| |346|22551| |2360|100308| |621|37044| |6299|372198
146 |2017|439|73172| |20|1091| |341|21921| |2411|101681| |631|37338| |6363|376769
147 |2018|443|73615| |20|1091| |336|21181| |2358|97024| |642|37587| |6360|373281
148
149 Unit counts as of January 31, 2018 for Walmart International are summarized by major category for each geographic market as follows:
150
151 |=Geographic Market|=Retail|=Wholesale|=Other|=Total
152 |Africa(3)|335|89|—|424
153 |Argentina|106|—|—|106
154 |Brazil|380|70|15|465
155 |Canada|410|—|—|410
156 |Central America|778|—|—|778
157 |Chile|373|5|—|378
158 |China|424|19|—|443
159 |India|—|20|—|20
160 |Japan|336|—|—|336
161 |Mexico|2186|162|10|2358
162 |United Kingdom|617|—|25|642
163 |Total|5945|365|50|6360
164
165 Digital. Walmart International operates eCommerce websites in numerous countries. Customers have access through its eCommerce websites and, in countries where available, mobile commerce applications to a broad assortment of merchandise and services, both of which vary by country. The company's omni-channel offerings include capabilities like "Click & Collect" in the United Kingdom and its grocery pick-up and delivery business in several other markets.
166
167 Merchandise. The merchandising strategy for Walmart International is similar to that of its operations in the U.S. in terms of the breadth and scope of merchandise offered for sale. While brand name merchandise accounts for a majority of its sales, Walmart has both leveraged U.S. private brands and developed market specific private brands to serve its customers with high quality, lower priced items. Along with the private brands the company market globally, such as "Equate," "George," "Great Value," "Holiday Time," "Mainstays," "Ol' Roy" and "Parent's Choice," its international markets have developed market specific brands including "Aurrera," "Cambridge," "Chosen by You" and "Extra Special." In addition, Walmart has developed relationships with regional and local suppliers in each market to ensure reliable sources of quality merchandise that is equal to national brands at low prices.
168
169 Operations. The hours of operation for operating units in Walmart International vary by country and by individual markets within countries, depending upon local and national ordinances governing hours of operation. Operating units in each country accept a variety of payment methods.
170
171 Seasonal Aspects of Operations. Walmart International's business is seasonal to a certain extent. Historically, the segment's highest sales volume and operating income have occurred in the fourth quarter of its fiscal year. The seasonality of the business varies by country due to different national and religious holidays, festivals and customs, as well as different weather patterns.
172
173 Competition. Walmart International competes with both physical retailers who operate department, drug, discount, variety and specialty stores, supermarkets, hypermarkets and supercenter-type stores, wholesale clubs, home-improvement stores, specialty electronics stores, cash & carry operations and convenience stores, and digital retailers, as well as catalog businesses. The company also operate, on a limited basis, consumer credit operations. The company compete with others for desirable sites for new or relocated units. The company's ability to develop, open and operate units at the right locations and to deliver a customer-centric experience that seamlessly integrates digital and physical shopping determines, to a large extent, its competitive position in the markets in which Walmart International operates. The company believe price leadership is a critical part of its business model and the company continue to focus on moving its markets towards an EDLP approach. Additionally, its ability to operate food departments effectively has a significant impact on its competitive position in the markets where the company operate. In the markets in which Walmart has eCommerce websites or mobile commerce applications, those websites and applications help differentiate it from its competitors and help it compete with other retailers for customers and their purchases, both in its digital and physical retail operations.
174
175 Distribution. The company utilize a total of 188 distribution facilities located in Argentina, Brazil, Canada, Central America, Chile, China, Japan, Mexico, South Africa and the United Kingdom. Through these facilities, the company process and distribute both imported and domestic products to the operating units of the Walmart International segment. During fiscal 2018, approximately 83% of Walmart International's purchases passed through these distribution facilities. Suppliers ship the balance of Walmart International's purchases directly to its stores in the various markets in which the company operate. The following table provides further details of its international distribution facilities, including 17 dedicated eCommerce fulfillment centers, as of December 31, 2017, with the exception of distribution facilities in Canada, which are stated as of January 31, 2018:
176
177 |= |=Owned and Operated|=Owned and Third Party Operated|=Leased and Operated|=Third Party Owned and Operated|=Total
178 |International distribution facilities|43|12|87|46|188
179
180 The company ship merchandise purchased by customers on its eCommerce websites and through its mobile commerce applications by a number of methods from multiple locations including from its dedicated eCommerce fulfillment centers.
181
182 == Sam's Club Segment ==
183
184 The Sam's Club segment operates membership-only warehouse clubs, as well as samsclub.com, in the U.S. and had net sales of $59.2 billion, $57.4 billion and $56.8 billion for fiscal 2018, 2017 and 2016, respectively. During the most recent fiscal year, no single club location accounted for as much as 1% of total Company net sales.
185
186 Membership. Beginning in the year ending January 31, 2019 ("fiscal 2019"), Sam's Club simplified the membership program. The following two options are available to members:
187
188 |= |=Membership Type|=.
189 | |**Plus**|**Club**
190 |Annual Membership Fee|100|45
191 |Number of Add-on Memberships ($40 each)|Up to 16|Up to 8
192 |Eligible for Cash Rewards|Yes|No
193 |Eligible for Free Shipping|Yes|No
194
195 All memberships include a spouse/household card at no additional cost. Plus Members are eligible for Cash Rewards, which is a benefit that provides $10 for every $500 in qualifying Sam's Club purchases up to a $500 cash reward annually. The amount earned can be used for purchases, membership fees or redeemed for cash. Plus Members are also eligible for Free Shipping on the vast majority of merchandise available online, with no minimum order size. Free Shipping is yet another example of creating a new Sam's Club for its members.
196
197 Physical. As a membership-only warehouse club, Sam's Club facility sizes generally range between 94,000 and 168,000 square feet, with an average size of approximately 134,000 square feet.
198
199 The following table provides the retail unit count and retail square feet for the fiscal years shown:
200
201 |=Fiscal Year|=Opened|=Closed|=Total|=Square Feet
202 |Balance forward| | |620|82653
203 |2014|12|—|632|84382
204 |2015|16|-1|647|86510
205 |2016|8|—|655|87552
206 |2017|9|-4|660|88376
207 |2018|4|-67|597|80068
208
209 Digital. Sam's Club provides its members access to a broad assortment of merchandise, including products not found in its clubs, and services online at samsclub.com and through its mobile commerce applications. Samsclub.com experiences on average 20.4 million unique visitors a month and offers access to approximately 59,000 SKUs providing the member the option of delivery direct-to-home or to the club through services such as "Club Pickup." Digital retail supports its physical clubs with capabilities like "Scan and Go," a mobile checkout and payment solution, which allows members to bypass the checkout line.
210
211 Merchandise. Sam's Club offers merchandise in the following five merchandise categories:
212
213 * Grocery and consumables includes dairy, meat, bakery, deli, produce, dry, chilled or frozen packaged foods, alcoholic and nonalcoholic beverages, floral, snack foods, candy, other grocery items, health and beauty aids, paper goods, laundry and home care, baby care, pet supplies and other consumable items;
214 * Fuel and other categories consists of gasoline stations, tobacco, tools and power equipment, and tire and battery centers;
215 * Home and apparel includes home improvement, outdoor living, grills, gardening, furniture, apparel, jewelry, housewares, toys, seasonal items, mattresses and small appliances;
216 * Technology, office and entertainment includes electronics, wireless, software, video games, movies, books, music, office supplies, office furniture, photo processing and third-party gift cards; and
217 * Health and wellness includes pharmacy, optical and hearing services and over-the-counter drugs.
218
219 The Member's Mark brand continues to expand assortment and deliver member value. In fiscal 2018, Member's Mark sales exceeded $10 billion, driven by growth in grocery, seasonal items and apparel. The percentage of net sales for Sam's Club, including eCommerce sales, by merchandise category, was as follows for fiscal 2018, 2017 and 2016:
220
221 |= |=Fiscal Years Ended January 31,|=%|=%
222 |MERCHANDISE CATEGORY|2018|2017|2016
223 |Grocery and consumables|58|59|59
224 |Fuel and other categories|21|20|20
225 |Home and apparel|9|9|9
226 |Technology, office and entertainment|6|6|7
227 |Health and wellness|6|6|5
228 |Total|100|100|100
229
230 Operations. Operating hours for Sam's Clubs are generally Monday through Friday from 10:00 a.m. to 8:30 p.m., Saturday from 9:00 a.m. to 8:30 p.m. and Sunday from 10:00 a.m. to 6:00 p.m. Additionally, all club locations offer Plus Members the ability to shop before the regular operating hours Monday through Saturday, starting at 7:00 a.m. A variety of payment methods are accepted at its clubs and online, including the co-branded Sam's Club "Cash Back" MasterCard.
231
232 Seasonal Aspects of Operations. Sam's Club's business is seasonal to a certain extent due to calendar events and national and religious holidays, as well as different weather patterns. Historically, its highest sales volume and segment operating income have occurred in the fiscal quarter ending January 31.
233
234 Competition. Sam's Club competes with other membership-only warehouse clubs, the largest of which is Costco, as well as with discount retailers, retail and wholesale grocers, general merchandise wholesalers and distributors, gasoline stations as well as digital retailers and catalog businesses. At Sam's Club, the company provide value at members-only prices, a quality merchandise assortment, and bulk sizing to serve both its Plus and Club members. The company's eCommerce website and mobile commerce applications have increasingly become important factors in its ability to compete with other membership-only warehouse clubs.
235
236 Distribution. During fiscal 2018, approximately 68% of Sam's Club's non-fuel purchases were shipped from Sam's Club's 22 dedicated distribution facilities located strategically throughout the U.S., or from some of the Walmart U.S. segment's distribution facilities, which service the Sam's Club segment for certain items. Suppliers shipped the balance of the Sam's Club segment's purchases directly to Sam's Club locations. The following table provides further details of its dedicated distribution facilities, including two dedicated eCommerce fulfillment centers and two dedicated import facilities, as of January 31, 2018:
237
238 |= |=Owned and Operated|=Owned and Third Party Operated|=Leased and Operated|=Third Party Owned and Operated|=Total
239 |Sam's Club distribution facilities|3|3|3|13|22
240
241 The principal focus of Sam's Club's distribution operations is on cross-docking merchandise, while stored inventory is minimized. Cross-docking is a distribution process under which shipments are directly transferred from inbound to outbound trailers. Shipments typically spend less than 24 hours in a cross-dock facility, and sometimes less than an hour.
242
243 Sam's Club uses a combination of its private truck fleet, as well as common carriers, to transport non-perishable merchandise from distribution facilities to clubs. The segment contracts with common carriers to transport perishable grocery merchandise from distribution facilities to clubs.
244
245 Sam's Club ships merchandise purchased by members on samsclub.com and through its mobile commerce applications by a number of methods from its dedicated eCommerce fulfillment centers and other distribution centers.
246
247 == Other Segment Information ==
248
249 Certain financial information relating to its segments is included in Part II, Item 7 under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in Note 15 to its Consolidated Financial Statements. Note 15 also includes information regarding total revenues and long-lived assets aggregated by its U.S. and non-U.S. operations.
250
251 = Intellectual Property =
252
253 The company regard its trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies, and similar intellectual property as important to its success, and with respect to its associates, customers and others, the company rely on trademark, copyright, and patent law, trade-secret protection, and confidentiality and/or license agreements to protect its proprietary rights. Walmart has registered, or applied for the registration of, a number of U.S. and international domain names, trademarks, service marks and copyrights. Additionally, Walmart has filed U.S. and international patent applications covering certain of its proprietary technology. Walmart has licensed in the past, and expect that the company may license in the future, certain of its proprietary rights to third parties.
254
255 = Suppliers and Supply Chain =
256
257 As a retailer and warehouse club operator, the company utilize a global supply chain that includes over 100,000 suppliers located around the world, including in the United States, from whom the company purchase the merchandise that the company sell in its stores, clubs and online. In many instances, the company purchase merchandise from producers located near the stores and clubs in which such merchandise will be sold, particularly products in the "fresh" category. The company's purchases may represent a significant percentage of a number of its suppliers' annual sales, and the volume of product the company acquire from many suppliers allows it to obtain favorable pricing from such suppliers. The company's suppliers are subject to standards of conduct, including requirements that they comply with local labor laws, local worker safety laws and other applicable laws. The company's ability to acquire from its suppliers the assortment and volume of products the company wish to offer to its customer, to receive those products within the required time through its supply chain and to distribute those products to its stores and clubs determines, in part, its in-stock levels in its stores and clubs and the attractiveness of its merchandise assortment the company offer to its customers and members.
258
259 = Employees =
260
261 As of the end of fiscal 2018, Walmart Inc. and its subsidiaries employed approximately 2.3 million employees ("associates") worldwide, with 1.5 million associates in the U.S. and 0.8 million associates internationally. Similar to other retailers, the Company has a large number of part-time, hourly or non-exempt associates. The company believe its relationships with its associates are good and are continuing to improve. A large number of associates turn over each year, although Walmart U.S. turnover has been improving in fiscal 2018 as a result of its focus on increasing wages and providing improved tools, technology and training to associates.
262
263 Certain information relating to retirement-related benefits the company provide to its associates is included in Note 12 to its Consolidated Financial Statements.
264
265 In addition to retirement-related benefits, in the U.S., the company offer a broad range of Company-paid benefits to its associates. These include a store discount card or Sam's Club membership, bonuses based on Company performance, matching a portion of purchases of its stock by associates through its Associate Stock Purchase Plan and life insurance. In addition to the health-care benefits for eligible full-time and part-time associates in the U.S., as announced in January 2018, the company expanded maternity leave and implemented a new paid parental leave program to all full-time associates. The company also introduced a $5,000 benefit to assist eligible associates with adoption.
266
267 = References =
268
269 {{putFootnotes/}}
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