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NEW YORK, United States — Target Corp. and Wal-Mart Stores Inc. both saw a big slowdown in online sales growth last quarter, fuelling concern that the brick-and-mortar chains aren't transitioning fast enough to e-commerce.
Target’s Internet sales grew 20 percent third quarter, missing the 30 percent gain it expected, the retailer said on Wednesday. The previous day, Wal-Mart posted quarterly e- commerce growth of 10 percent, compared with 16 percent in the second quarter and 21 percent a year earlier.
The deceleration underscores the challenge of competing with Amazon.com Inc., the world’s largest Internet retailer. Wal-Mart is spending as much as $1.5 billion this year to improve its e-commerce operations, and investors expect to see a big bump in sales. Target also has stepped up its online investments.
"If you don't get the revenue, then what kind of return are you getting?" said Brian Yarbrough, an analyst with Edward Jones & Co.
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Total e-commerce sales increased 15 percent in the U.S. last quarter, according to the U.S. Census Bureau. Online sales accounted for 7.4 percent of total retail sales in the quarter.
Target shares fell 4.3 percent to $69.81 as of 9:50 a.m. in New York on Wednesday. Wal-Mart rose less than 1 percent to $60.48.
Despite the slowdown, Target said it was satisfied with its online growth, especially considering that many retailers are doing worse.
“This is still an area of opportunity for us," Chief Financial Officer Cathy Smith said on a conference call. “We have to improve our site experience, and we are investing in that.”
By Shannon Pettypiece; editors: Nick Turner and Mark Schoifet.
