Economist GMAT Reading Comprehension Challenge #27

Economist GMAT Reading Comprehension Challenge #27

Welcome back to the Economist Reading Comprehension Challenges! Just getting started? Here are some reading strategies on the EGRCC home page.

Economist Article

Economist Article: Walmart ekes out an edge in groceries during the pandemic

Link: https://www.economist.com/business/2020/05/23/walmart-ekes-out-an-edge-in-groceries-during-the-pandemic

Paragraph Summaries

As COVID-19 began…

Amazon’s pandemic-related expenses are eating away at its profits this quarter, while Walmart is performing comparatively better in certain respects.

On May 19th the answer…

Walmart’s earnings suggest very strong performance. The year on year rate of revenue increase in the highest in nearly 20 years and “omnichannel” sales (online + in-store) are up by 74%. Walmart is outperforming Amazon on quarterly net income relative to last year (Amazon is down on this metric).

The sales surge was not…

Walmart’s numbers can somewhat be attributed to heavy sales in March but have maintained since.

Walmart’s performance owes…

Walmart is continually able to contain expenses – its cost of sales last quarter rose in line with revenues.

But the company has also…

Walmart has been flexible in its approach to fulfillment, drastically ramping up its “ship from stores” and two-hour delivery services.

Walmart allows shoppers…

Walmart accommodates “blended purchases” of food products – online orders that can be delivered or picked up curbside – and this helps drive omnichannel sales.

It is here that Walmart has outshone Amazon…

Amazon’s online grocery delivery services suffer in comparison, with its Whole Foods grocery line being pricier than Walmart’s alternative and its cheaper Amazon Fresh service struggling to meet demand in a timely manner.

This has allowed Walmart at last…

Walmart’s ~$15B investment in e-commerce was considered a financial loss in previous years, but now the outlook is potentially a little brighter for the future.

Some new customers…

While some customers may not continue with Walmart’s digital services once their preferred brick-and-mortar retailers reopen, evidence from the 2008 recession indicates that Walmart may retain many of them.

His view is bolstered…

A previous study suggests that future consumer behavior is tending less towards purely in-store or online retailers and more towards hybrid services like the one Walmart is using.

Primary Purpose

To discuss a surprising new trend and provide evidence that it may be able to persist

Main Idea

Walmart’s grocery delivery and pickup service has overcome initial challenges and is now edging out Amazon’s competing services in many important respects, and there are reasons to believe that competitive edge will persist into the long term.

Happy Studies

Hope you found the article interesting and the breakdown helpful. Good luck getting your GMAT reading in championship shape!

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