Walmart’s success story ‘will be taught at Harvard Business School’ after its wage gamble paid off
A decade ago, Walmart (WMT) made a bold move that would define its next decade and cement its place as both a retail powerhouse and a stockholder’s dream.
In 2015, the company raised pay for nearly half of its one million hourly employees, an unusual step at a time when turnover was high and morale was low.
Investors didn’t like it at first. Walmart shares dropped about 10% on the news. However, a decade later, the strategy has proved to be a masterstroke.
Since 2016, Walmart has boosted hourly wages by roughly 48%, helping create “a happier and more productive workforce, better shopping experience, and a 450% surge in its stock price,” according to Charlie Bilello, chief market strategist at Creative Planning.
“This fall, Walmart’s success story will be taught at Harvard Business School as a case study of success,” Bilello wrote.
The results speak for themselves: Walmart’s per-share earnings have accelerated in recent years, and annual revenue climbed to more than $680 billion in 2024, with $693 billion reported for the 12 months ending July 31.
Today, Walmart shares trade above $107, giving the company a market capitalization of over $858 billion, a remarkable rise for a retailer once criticized for underpaying its workers.
Is AI Walmart’s next growth driver?
After boosting employee morale and productivity through higher wages, Walmart now appears intent on taking the next leap in efficiency — powered by artificial intelligence.
The retail giant recently announced a partnership with OpenAI, the developer behind ChatGPT, underscoring its growing investment in AI applications.
It also appointed a new executive vice president of AI acceleration, product, and design, a move that signals how central digital transformation has become to Walmart’s strategy.
According to Goldman Sachs, Walmart disclosed in September that it plans to overhaul its digital experience “with the timeline being months, not years.” The company cited opportunities to “serve customers and members more effectively,” while also improving productivity and reducing costs.
Walmart executives have cited the use of “super agents,” which are advanced AI-powered tools designed to assist employees and customers by handling complex tasks and improving the overall shopping experience.
Analysts say this push could meaningfully expand Walmart’s e-commerce footprint, which currently accounts for roughly 18% of total sales, according to industry estimates.
In its most recent quarter, Walmart reported a 25% year-over-year increase in online sales. The retailer has now posted double-digit e-commerce growth for 13 consecutive quarters — a streak that began in the second quarter of 2023.