The world’s largest retailer - Walmart - returned to comp growth (0.5%) in Q3, the first time it has been in positive territory in nearly two years.

However, the fact this was achieved singularly through increases in average ticket (+1.2%) rather than traffic (-0.7%) took some shine off the performance. As did the 1.2% decline in operating income, which the business attributed to higher healthcare costs and incremental investment in ecommerce.

More encouragingly, Neighborhood Market achieved a comp of 5.5% in the quarter and continues to be the main focus of expansion going forward. With the smaller-box Walmart Express now subsumed into the Neighborhood Market business, the US business now comprises just two core banners. For the time being at least, Neighborhood Market will therefore cover a wide remit of footprints, ranging from around 12,000-45,000 sq ft.

New head of Walmart US Greg Foran has now been in the job for over 100 days, apparently devoting a large proportion of his time to visiting the shopfloor. He reiterated that addressing in-stock issues was one of his key strategic areas of focus. Whether the positive comp was a direct result of self-help measures introduced during his tenure to date is something of a moot point.

Favourable macro climate

The macro environment has become far more favourable in recent months on the back of deflation in gas prices, stronger consumer sentiment and better employment markets. The recovery in performance thus far has probably been driven more by external conditions than internal initiatives.

The sharp downturn at Sam’s Club in the early part of this year sent out something of a shockwave. Thankfully, this now appears to have been reversed in a relatively short space of time.

Comp sales at Sam’s Club grew 0.4% in Q3, fuelled by increases in both ticket (+0.2%) and traffic (+0.2%). Operating income rose by 12% to US$493 million. The strong performance was achieved despite the fact that the period lapped the fee increase last year. Membership income during the quarter increased by 10.1%.

Meanwhile, the figures for the international business are testament to the evolution we believe is taking place behind the scenes. Less spectacular than before, but more controlled. Net sales grew by just 1.7% (+2.9% at constant currency rates), a rate that seems paltry compared to the high single-digit growth to which we have become accustomed in recent years.

But in many respects, less is more, and the positive growth in income of 3.7% is perhaps a better barometer of the improving health of the business.