Major Retailers Under Scrutiny After Amazon Forecasts Weak Sales

Analysts are reportedly awaiting earnings reports from major retailers with interest after Amazon’s latest results “sent a chill” through the sector.

Amazon reported its results Thursday (Aug. 1), while Walmart will do so on Aug. 15, followed by Target and Kroger, Reuters reported Friday (Aug. 2).

In its report, Amazon said it saw slowing online sales in the second quarter and forecast a weak current quarter, saying that consumers are looking for bargains, according to the report.

“(Amazon’s result) has sent a chill through the wider retail sector,” Neil Saunders, managing director of research firm GlobalData, said in the report. “That said, for a value-focused retailer like Walmart, performance may be better as its offers are more centered around essential products.”

Wall Street expects Walmart to report a 4% rise in quarterly revenue, which would be its slowest growth rate in nearly two years, the report said, citing global financial infrastructure and data provider LSEG.

At the same time, the retailer has advantages over some competitors in the current climate due to its negotiating power with vendors, low retail prices, inventory control, product selection and investments in automation, per the report.

When reporting Amazon’s second-quarter earnings on Thursday, Amazon CEO Andy Jassy said: “While consumers are being careful on price, our North American unit growth is meaningfully outpacing our sales growth as our continued work on selection, low prices and delivery has resonated so far this year.”

Amazon and Walmart have been upping their discounting efforts in an effort to secure the loyalty of cost-conscious consumers, PYMNTS reported in June.

For example, Amazon is reportedly gearing up to add a section featuring low-cost items shipped from China to overseas consumers, while Walmart went all-in on summer discounting events like its recently completed Walmart+ Week and Walmart Deals.

Consumers are still feeling the burden of high prices, despite the fact inflation expectations are ticking down, PYMNTS reported on July 26.

In addition, consumer spending has been outpacing disposable personal income growth — with month-over-month growth of 0.3% versus 0.2%, respectively, in June — making the pressures on the wallet only grow more pronounced.

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