WMT Stock: This Chart Should Keep Wal-Mart Shareholders Up at Night

WMT StockIs This Bad News for WMT Stock?

Wal-Mart Stores, Inc. (NYSE:WMT) is no longer the king of retail. Although WMT stock is still a behemoth, its position atop the food chain has been usurped by none other than Amazon.com, Inc. (NASDAQ:AMZN).

Or at least that’s according to an analyst at Wells Fargo & Co (WFC).

Matt Nemer, a retail expert at WFC, recently shared some disturbing trends about Wal-Mart. According to data from FactSet and the U.S. Census Bureau, the company’s share of retail growth has evaporated over the last 15 years. And WMT stock’s decline coincided with the rise of Amazon.

Wal-Mart’s fall from grace has been steep enough to force mass store closures. Last month, the company announced it was shuttering 269 stores, resulting in 16,000 layoffs. (Source: “Walmart Continues Sharpened Focus on Portfolio Management,” Wal-Mart Press Releases, January 15, 2016.)

Retail Sales Growth Chart

The news was announced a month ago, but Matt Nemer’s analysis is likely going to revive worries about WMT stock. Here’s what Wal-Mart had to say last month:

“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.” (Source: Ibid, emphasis added.)

Many analysts perceive Wal-Mart’s pivot to e-commerce as a tacit acknowledgement of Amazon’s success. Customers are moving online at a rapid pace.

Amazon captured 22% of all increases in the retail sector during 2014. A year later, it very nearly doubled its share of this growth. The numbers even hold up under closer inspection.

In the fourth quarter of 2015, the company owned 51% of retail growth. If that doesn’t look like the end, what does?