Hello! With Thanksgiving almost upon us, millions of Americans are set to drive, fly, train or bus their way across the country to see family and friends. Millions will also find themselves stepping into a Walmart to pick up those last few essential items — or even an entire feast’s worth of food and drink. So, today we’re exploring the gargantuan scale of America’s biggest retailer.

Walmart’s world

‍We know you know Walmart is big, but it’s hard to overstate just how big America’s largest retailer actually is. In addition to selling the most stuff and employing the most people of any private employer, Walmart's physical footprint is unmatched, with enough floor space in stores in the US alone to fit some 12,500 football fields.

On the topic of employment, Walmart’s roster is nothing short of an army, employing approximately 1.6 million “associates” just in the US — more than the 1.4 million people that call Hawaii home — enough to make it the 41st most-populous state in the country.

Ka-ching

‍In its most recent fiscal year, Walmart sold $606 billion worth of stuff, which is a number so big it’s almost meaningless on its own. $606 billion is more than the annual output of most countries on Earth. Not some countries, most countries. Indeed, were it a sovereign nation, Walmart’s revenue would be enough to rank around 27th in the world, more than the GDP of Sweden, Singapore, New Zealand and Norway (with all of its oil riches).

That shakes out to around $69m an hour, and it means that since you started reading this newsletter (which we’re assuming was about a minute ago if you haven’t skimmed too much), Walmart has sold ~$1.15m worth of merchandise.

When Walmart coughs…

‍The sheer size of Walmart, which also operates Sam’s Club, makes it a unique barometer of the American consumer. When Walmart execs talk about a trend, economists listen. That’s why the company's warning last week, in which CFO John Rainey forecast weaker spending going into the holiday season, was taken seriously. The fact that consumers continue to feel price sensitive, having endured inflation for much of the last 2 years, is perhaps no surprise.

With more bargain-seeking shoppers walking its aisles than any other retailer, Walmart only gets to stay in business by being hyper-competitive on price. But, despite its gargantuan economies of scale, the retailer ekes out a surprisingly small sliver of profit on its sales, reporting just a 2.2% net profit margin so far this year.

Of course, there’s no need to get your violins out for Walmart shareholders any time soon, because when you sell as much Walmart does, even a 2.2% margin shakes out to a not-so-slim$10.6bn in profit — and that's just for the first 9 months of its latest fiscal year.

Amazon ran, so Walmart could walk

One part of Walmart’s business that comes with tastier margins is its booming e-commerce division. As we charted earlier this year, Walmart's online business has been on fire, growing between 2019 and 2023 at a similar pace to that which e-commerce trailblazer Amazon achieved from 2007-2011.

That opens up new opportunities for Walmart, like advertising. Indeed, Walmart execs expect selling advertising on Walmart.com, or collecting fees from merchants that use its online marketplace, to make larger contributions to future profit growth than just selling more stuff.

That its online presence is now a source of optimism is certainly ironic, having grappled with online retailers for much of the last two decades. Indeed, following fierce price wars between Amazon and Walmart, like the one on books in the early 2000s, many expected Jeff Bezos's monolith to eat Walmart's lunch.

Although Amazon’s meteoric rise — surpassing Walmart as the more valuable company back in 2015 — has been remarkable, Walmart's core business has held up just fine. Indeed, even with the sharp drop on Friday, Walmart’s share price remains near its all-time peak, up 63% over the last 5 years.

‍Low prices, high costs

‍Whether stifling Mom-and-Pop stores in small towns, being accused of the poor treatment of animals in its supply chain, or just its general treatment of its workforce, Walmart hasn't gotten to its place at the top of the food chain without racking up a long list of controversies. The company's high staff turnover rate has been a particular focus, as has the company's anti-union practices, which some say make Walmart among the nation's most aggressive anti-union organizations.

Although it may feel like it's always been a permanent part of the American business landscape, Walmart is in some ways still young, having only been founded in 1962. It's also unique in that it remains majority-owned (~50%) by direct descendants of its founder, Sam Walton. The fortune has been passed down through the Walton generations — a family who won't be wanting for any material objects at the Thanksgiving table this year, with a collective net worth of some $200-250bn.

Thanks for reading. See you tomorrow, when we return to our regular scheduled programming! Have some feedback or want to sponsor this newsletter?