According to the company, for the fourth quarter of 2016 Walmart:

Total revenue was $130.9 billion, an increase of 1.0%. Excluding currency , total revenue was $133.6 billion, an increase of 3.0%. Walmart U.S. comp sales increased 1.8%, driven by a traffic increase of 1.4%. Neighborhood Market comps increased approximately 5.3%. E-commerce growth at Walmart U.S. was strong as sales and GMV increased 29.0% and 36.1%, respectively, including Jet.com and online grocery.

Growth is good.  Starting with something as huge and mature as Walmart, one percent growth is quite good.  A double-digit GMV increase -- Gross Merchandise Value -- is very good.  GMV usually does not include discounts, costs involved and returns of products.  So.. don't read "net sales".

I want to see more detail.  But this seems to reinforce other outputs that suggest the Jet.com purchase may be paying off.

UPDATE:  After looking at more detail, what stands out is an 8 percent drop in profits compared to the same quarter one year earlier.  Several commentators and news reports characterize this as "investing" in price differentiation.  Investors seemed to agree rewarding the company with a 3 percent surge in the stock price.

A February 27 report by Reuters gives more detail on how Walmart is "investing in price":

Spot checks by Reuters on a basket of grocery items sold by competing Aldi and Wal-Mart stores in five Iowa and Illinois cities showed Wal-Mart's bid to lower prices is already taking hold. Wal-Mart consistently offered lower prices versus Aldi, an improvement over recent analyst estimates that Wal-Mart's prices have been as much as 20 percent higher than Aldi on many grocery staples... 

The big box retailer also held meetings last week in Bentonville, Arkansas with food and consumer products vendors, including Procter & Gamble (PG.N), Unilever PLC (ULVR.L), Conagra Brands Inc (CAG.N), and demanded they reduce the cost they charge the retailer by 15 percent, sources said. 

Wal-Mart also said it expects suppliers to help the company beat rivals on head-to-head pricing 80 percent of the time, these vendor sources said. The wide-ranging meeting with suppliers - where Wal-Mart discussed other topics - was also attended by Johnson & Johnson (JNJ.N) and Kraft Heinz Co (KHC.O), among others, sources told Reuters. The consumer goods companies did not respond to Reuters requests seeking comment. 

These Wal-Mart moves signal a new front in the price war for U.S. shoppers, as the pioneer of everyday low pricing seeks to regain its competitive pricing advantage in traditional retailing.

 Optimizing volume-with-price can shave profit-margins, but preserves market-share and net revenues.

According to Reuters:

Wal-Mart Stores Inc for the first time will combine its own buying for products sold at its stores with purchases it makes for its website, sources said, a significant move to stamp out duplicate efforts as it consolidates buying operations to better fight Amazon.com... Wal-Mart has told some vendors it is seeking to make the buying process more efficient for itself and vendors, and improve coordination between its buying teams. It also wants to apply its bricks-and-mortar expertise in securing the lowest possible prices to its e-commerce business, according to the vendors,

Basically Wal-Mart will stop placing separate orders for online and offline channels.  There will be one Wal-Mart buy.

Big move. Smart move. Internal procurement-channels will be tough to rewire.  Important to long-term competitiveness.  Crucial to any really integrated omni-channel strategy.  Until now it has been mostly online and offline parallels.

Monday the CIPS Supply Chain Risk Index -- reviewing calendar year 2016 -- concluded, "A combination of economic nationalism, rebounding commodity prices and the growth of a burgeoning Chinese middle class is making long international supply chains a more risky prospect..."

John Glen, a contributor to the CIPS report, said,

Re-shoring supply chains will be an increasingly attractive prospect in the months to come. But, these are uncertain times for supply chain managers and there is no quick fix for the months ahead.It is more important than ever for supply chain managers to listen to their suppliers, develop closer relationships with them and to monitor any changes, so they can react quickly and ensure their supply chains remain resilient.

Many supply and demand networks are complex adaptive systems. High velocity demand tends to drive rapid adaptation and related emergence of complexity.

In many markets demand is increasingly time-sensitive.  A more agile supply network may quickly displace others... at least for a time.  Doing so again and again over time can totally transform the competitive landscape.  Apple Music?  Amazon? Uber? What's next?

Over the last thirty-plus years many supply chains have dispersed over long distances. This has allowed complicated products -- computers, phones, and more -- to benefit from widely distributed comparative advantages: assembling the best-of-the-best or least-costly-pieces depending on strategy.

Less complicated products -- clothing, for example -- have also sought piece-making advantages. But what worked when corporate buyers could plan and procure for "next season" is fast becoming a disadvantage. In the last quarter of 2016 Zara moved a winter coat concept to delivery in just 25 days. Eleven of those days were spent manufacturing 18,000 coats.

One way that fast-fashion and other high-velocity competitors are looking to enhance their agility is by relocating more of their supply chain components closer to more of their customers.  It is worth noting that whether this results in reshoring or offshoring depends on where consumer demand is growing.

The Reshoring Initiative emphasizes data positive for US sourcing: "The combined reshoring and related FDI trends continued strong in 2015, adding 68,000 jobs and bringing the total number of manufacturing jobs brought from offshore to over 249,000 since the manufacturing employment low of 2010."

A.T. Kearney is not convinced and sees offshoring as by far the more significant economic force.

But whatever the market-trends of the last decade, President Trump has communicated he will give top priority to reshoring, promising to reverse a generation-long trend.

In late January, Peter Navarro, director of the new White House National Trade Council, told The Financial Times, “It does the American economy no long-term good to only keep the big box factories where we are now assembling ‘American’ products that are composed primarily of foreign components,” he told the Financial Times. “We need to manufacture those components in a robust domestic supply chain that will spur job and wage growth.”

Responding to Navarro, the conservative columnist George Will explains (complains):

Americans streaming movies from Netflix (based in Los Gatos, Calif.) erase American jobs in movie theaters and DVD rental stores. Americans buying books from Seattle-based Amazon have caused many American bookstores to do what Borders’ (400 stores, 11,000 employees) did: disappear. Americans using San Francisco-based Uber are destroying many taxi drivers’ jobs. Evidently our protectors in the administration must believe this: The destruction of American jobs because Americans buy goods or services of some American companies rather than those of other American companies is benign. But the destruction of American jobs because Americans buy goods or services of foreign companies is intolerable.

Navarro has argued that externalities -- such as tax policy, currency values, regulatory constraints, and misbehavior by trading partners -- have distorted the comparative advantage of close-to-consumer supply chains.  Will seems to argue that aspects of consumer demand -- price-sensitivity, innovation, quality -- are perpetual sources of disruption, even the core of an innately chaotic system.

I perceive it depends on the specific product and the nature of demand for that specific product. Where and when demand is more volatile, less price-sensitive and  higher velocity, the costs of staying physically close to consumers will often generate comparative advantages.  Reverse characteristics will drive production to the lowest common denominator... wherever it can be found and delivered-from with reasonable assurance.  Demand decides.  But demand is highly variable.

According to CBRE and DCVelocity:

Driven by booming e-commerce sales volumes, developers are building an increasing number of mega-warehouses spanning 1 million square feet and above, with the Philadelphia and eastern Pennsylvania area leading the way, according to a report released (February 2) by real estate and logistics services company CBRE Inc.... From 2010 to 2016, 117 such facilities were built, for a total of 141.2 million square feet. By contrast, 99 facilities were built between 2003 and 2009, according to CBRE. The trend shows no sign of slowing: 29 more facilities are currently under construction, the report said. The key factor driving the trend is the need to house the sheer density of products flowing through online retail channels. As a result, e-commerce places much larger demands on warehouse space compared with other types of logistics operations. E-commerce users typically need two to three times the amount of warehouse and distribution space that traditional users do, because online fulfillment requires more inventory, labor, and automation.

Does this suggest increasing concentration -- or actually the opposite?  Is the supply chain system becoming more diversified and distributed as it adapts to e-commerce?  If so, is this a transitional or long-term system permutation?

According to the company, Kellogg's

... will begin to exit its Direct Store Delivery (DSD) network in the second quarter, transitioning the DSD-distributed portion of the company's U.S. Snacks business to the warehouse model already used by Pringles and the rest of its North American business. The new model will be transformational for Kellogg, reducing complexity and cost structure while driving growth and profitability for the company and its retail partners.

According to the Wall Street Journal the shift will involve closing thirty-nine US distribution centers.  Kellogg's products will be shipped to -- and then distributed from -- customer distribution centers.

The decision comes even as some food sector firms have indicated an interest in more DSD, in order to reduce both direct costs and elapsed time-to-consumer.  But many of these DSD innovations focus on either fresh product or high velocity product (ideally both), not the slower moving shelf-stable snack business.

In October I noted IBM and Walmart had begun an experiment to use Blockchain for supply chain management of pork in China. In November they began a US pilot where one packaged produce item is being piloted through the distributed ledger technology.  This morning a reporter contacted me -- a bit breathlessly -- about a rumor that Walmart has moved all fresh produce onto Blockchain.  I don't think so.  Not yet.  I think IBM PR resurfaced the November pilot and it is being misread and misheard.  But... right now I consider Blockchain-type tools to be the best bet for developing total transparency for demand and supply networks by tying payment to participation in the distributed ledger.

Last year I talked to several big grocery distributors serving dense urban areas in the United States.  I wondered what might be available to deliver to survivors of a catastrophic event: lets say a 7.0 plus earthquake followed by a long-term grid outage.

I was surprised.  Much more is on-hand than I had guessed.

Individual companies are understandably cautious with detailed information regarding volumes.  But above is what three big providers in a top-five urban area told me they had on-hand for a bit more than 2000 shelf-stable products (e.g. canned tuna, peanut butter, ramen).

The "projected ounces needed" is what the nearby principal jurisdiction estimated would be needed per day to serve 300,000 survivors.

So... not all of the shelf-stable products will survive the extreme event and 300,000 could be a serious under-estimate of need.  But still, 600 million ounces is a good start.

Until discovering this mother-lode of shelf-stable products close-at-hand, the local jurisdiction did not see how all the king's horses and all the king's men could ever secure that many calories in time.

Now the worry has shifted some from content to movement.  While the grocery distributors say the stuff will be available, they are not at all confident regarding their own ability to distribute, deliver, and allocate. Neither is the public sector.  But at least the problem is now better targeted.

All of this in more is given detailed attention in a new report: The Role of Groceries in Responding to Catastrophes.