Walmart Supplier News Brought to You By Retailing Today
Retailing Today serves the top retailers & their trading partners. Below are some of their 2013 articles taken from archived content. Issues of WSN (Walmart Supplier News) continue to be published. To read the most current articles about Walmart go to: www.retailingtoday.com/content/walmart.
2013 Insights Regarding Walmart
Wealth effect not in play at Walmart
August 2, 2013 | By Mike Troy
Surging home prices and 401K balances have millions of Americans feeling better about their personal balance sheets and the state of the economy, but Walmart’s core shoppers remain under duress and that could spell trouble for second quarter sales.
A still-challenging job market, a lack of wage growth and high energy costs means Walmart’s core paycheck-to-paycheck shopper is still making hard choices in store aisles between necessities and discretionary products and small versus large pack sizes. Evidence to that effect will be presented on August 15 when Walmart releases second quarter results for the period ended July 26.
The company’s second quarter same-store sales forecast is relatively modest, at flat to up 2%, but the U.S. stores division is lapping a prior year period when comps increased 2.2%. It is also worth noting that Walmart posted a 1.6% same-store sales decline in the first quarter ended April 30. There were some valid reasons for the weakness, which were acknowledged by others as well, such as the delay in income tax checks coupled with a payroll tax increase, a cold wet spring that negatively affected seasonal sales and reduced food inflation.
Some of those factors benefited second quarter results since tax refunds and seasonal sales were pushed into the early part of the second quarter. That said, there is a growing sense that momentum early in the quarter was not sustained. That, coupled with the fact that the bulk of back-to-school sales will fall into the second quarter, have created a sense of anxiety that Walmart’s second quarter sales forecast could be in jeopardy.
Free market voice argues for Walmart’s Boston presence
Aug 02, 2013
Left-leaning individuals in large urban areas find lots of reasons to dislike Walmart, so it is noteworthy when someone in a liberal stronghold forcefully sides with Walmart and personal freedom.
That was the case in Boston this week when the Boston Globe ran an article by Shirley Leung with the headline, “It’s time to say yes to Walmart.”
She acknowledged the familiar narrative put forth by those who seek to block Walmart’s expansion.
“It’s too easy to paint the world’s biggest retailer as the big bad wolf. You’ve read the script: It decimates mom-and-pop businesses, underpays workers and blights communities,” Leung wrote. “It is so evil that, according to a recent Globe survey, more mayoral candidates would rather see a casino in the city limits than a Walmart.”
However, Boston isn’t the former Soviet Union and the city’s residents should be allowed to choose where to shop. In essence, Leung makes the point that competition and the forces of a free market economy should be allowed to function.
Residents of the state aren’t strangers to Walmart; the company does operate nearly 50 stores there, including a unit in Northborough about an hour west of Boston that was recently expanded to a supercenter. However, there is nothing in Boston proper with the closest stores located on the north side of the city in Lynn and the south side in Quincy.
Walmart carries so many of not only the hottest items, but also the basics. Take for instance eyeglasses. I looked at online for large round glasses frames for myself. I really like that particular shape. I needed new frames but wanted to keep my same prescription. I went to the local optomotrist where everything is pretty pricey. Comparing the prices, plus shipping from an online store I thought I realized I could get a better deal going to Walmart. My neighbor told me that she had bought some eyeglasses at Walmarts and then sent them in to this online store called Eyeglasses.com and had them put in lenses with her prescription. It took a week or so, but she saved money. I decided to go the same route since I didn't need the glasses immediately. Ok so I didn't go to a local store, but saving money does matter. In the long run it was the right choice for me.
Another reason why EDLP makes sense
Aug 02, 2013
“Retail sales” ranked fourth on this year’s list of the top consumer complaints compiled by the Consumer Federation of America. That’s good news for Walmart.
The CFA, a consortium of 300 nonprofit consumer groups, and another organization called the North American Consumer Protection Investigators (NACPI) obtained complaint data from 38 agencies nationwide to identify the most common, fastest-growing and worst problem. The category of retail sales ranked fourth, the same as the prior year, and includes issues such as false advertising and other deceptive practices, defective merchandise, problems with rebates, coupons, gift cards and gift certificates and failure to deliver. Topping the list once again were cars, credit and home repair.
“The information compiled in the survey helps us as consumer protection agencies follow trends in consumer fraud, educate the public, and share information with each other, which will ultimately assist us in our investigations against fraud,” said Tonya Hetzler, Interim President of NACPI.
After the category of retail sales, which presumably isn’t an issue at Walmart because of its everyday low price strategy, were utilities, services, Internet sales, landlord/tenant issues, fraud, real estate, household goods and home solicitations.
A cautionary tale for Walmart buyers, suppliers
Aug 02, 2013
Walmart pulled a dietary supplement from its Web site this week following a report by USA Today that called into question the product’s safety and the track record of the supplier.
The product in question was a pre-workout supplement called Craze from supplier Matt Cahill who USA Today said has a history of putting risky supplements on the market. Walmart spokeswoman Dianna Gee said the product was pulled to, “allow us time to look further into not only the safety of the product, but also the integrity of the supplier.”
That raises the question of why the product's safety and the supplier’s integrity weren’t examined more thoroughly before the item was made available online. Walmart puts new products and suppliers through all sorts of vetting processes when it comes to putting products on the shelves of physical stores because real estate is limited and every inch of shelf space needs to be productive. Conversely, no such physical constraints exist online so expanding the breadth of assortment is not only possible it is a priority for Walmart.com.
Few categories have the breadth of assortment as nutritional supplements, but the industry also has lax regulation which allows some suppliers to get very inventive with product formulations and inferred claims and possible benefits. Nevertheless, after reading the USA Today piece you will wonder how Craze ever found its way on to Walmart’s Web site and what new protocols related to the new item introduction process may result from the incident....
New formats chief to leave Walmart
Aug 01, 2013
Less than a year after Walmart International named Lev Khasis to the role of president and CEO of new formats, the former Russian retail executive is heading back to his homeland to lead a financial institution.
Russia’s financial daily Kommersant reported that Khasis had accepted a position to serves as the deputy chairman of Sberbank, Russia’s largest bank. Khasis joined Walmart International in the fall of 2011 as SVP and chief leverage officer reporting to president and CEO Doug McMillon. Roughly one year later he was elevated to the role of president and CEO of new formats and tasked with developing concepts that could be deployed across international markets.
Prior to joining Walmart, Khasis had spent five years as CEO of X5, Russia’s largest food retailer and a company Walmart was one rumored to have an interest in acquiring.
Try before you buy – a membership – at Sam’s Club
Jul 26, 2013
Back-to-school shoppers get a free three day pass at Sam’s Club beginning August 2, as part of an initiative to increase membership at the warehouse club.
Sam’s is inviting shoppers to visit its more than 600 clubs beginning Friday, August 2, without paying any type of membership fee or non-member surcharge. The retailer has conducted similar open house events in the past as a means to expose shoppers to the Sam’s Club experience and hopefully convert a meaningful number to dues-paying members, at either the $45 base membership level or $100 Plus member level.
To accomplish that objective, Sam’s requires non-members to visit the club’s member services desk upon entering the building to receive a temporary membership pass. Non-members accessing SamsClub.com will be asked for their email address prior to checkout. And since it is back-to-school season, Sam’s also is offering collegiate membership that essentially the same as a basic $45 membership, except students and school organizations who sign up receive a $15 gift card.
Eastern Canada supercenter assault now underway
July 26, 2013 | By Mike Troy
Walmart has opened its first supercenter in Canada’s eastern Maritime provinces of New Brunswick and Nova Scotia. The retailer, which has operated in Canada for nearly two decades, plans to invest $90 million this year in the renovation and expansion of nine locations in New Brunswick and Novia Scotia.
"The addition of fresh groceries to our stores in the Maritimes is a major milestone for us as it extends our fresh food offering from the Pacific to the Atlantic," said Shelley Broader, president and CEO of Walmart Canada. "We are very excited to introduce our supercenter format to Atlantic Canada and help our east coast customers save money on their groceries every week."
As part of its effort to sell more food in eastern Canada, the retailer also introduced a new program called Brands You Recognize which features goods sourced from local suppliers.
"Our food team has been working with new local suppliers and our existing suppliers to ensure we are providing customers in the Maritimes with the quality products and assortment they expect," Broader said.
The stores are located in the New Brunswick communities of Fredericton, Dieppe, Saint-John and Moncton and the Nova Scotia communities of Dartmouth, Halifax and Bedford/Sackville.
Walmart Canada currently operates 380 locations of which 217 are supercenters.
New study dings Walmart store experience AND price
Jul 26, 2013
Walmart knows it isn’t going to win any supermarket industry prizes for store experience, not when operators such as Whole Foods and Publix are involved, but not leading the pack on price is a different matter.
A study of 6,645 consumers in May conducted by Market Force was designed to uncover where consumers prefer to shop and rated companies on different satisfaction measures to produce a customer delight index. Those ranked highest overall in the upper right quadrant were familiar names that tend to top such rankings, including Traders Joe’s, Publix, Whole Foods, Wegmans and Aldi. Walmart ranked lowest on the delight index and appeared in the low left hand quadrant, which is somewhat ironic considering the company’s status as the nation's largest food retailer. Those looking to understand this dichotomy could point to the fact that 60% of participants said their household incomes were above $50,000. Consequently, there may have been some anti-Walmart bias built in as there is a tendency among more affluent shoppers to look down their noses at the great unwashed masses who frequent Walmart and factor into their assessment of the store experience.
In addition, the study said it was designed to uncover where shoppers “prefer” to shop which could be materially different from where they “actually” do the majority of their shopping. However, such distinctions are splitting hairs and the bottom line is the results are disconcerting for a retailer intent of elevating perceptions of its food shopping experience and has featured produce and meat in recent national ad campaigns.
What’s also concerning from Walmart’s perspective is that the company did not lead the pack on price perception. That distinction fell to Aldi and then WinCo Foods, followed by Walmart, Costco and Sam’s Club.
Is Walmart really getting “slayed” by Publix?
July 26, 2013
No one would dispute that Lakeland, Fla.-based supermarket is a wonderful operator, but a piece in the August 12 issue of Forbes takes things a little too far and characterizes the regional operator of 1,073 stores as, “the Wal-Mart Slayer.”
The sensational headline sits atop a glowing article about “how Publix’s people-first culture is winning the grocer war.” The piece is so charitable it reads as if the company’s corporate affairs staff had commissioned it. There are quotes about competing with Walmart from Publix CEO Ed Crenshaw and president Todd Jones, but generally the focus is on what an awesome place Publix is.
Walmart.com: doing what no one else can do
July 26, 2013
Walmart.com is already a large, fast growing and dynamic organization, but global e-commerce president and CEO Neil Ashe is intent on executing an integrated vision of commerce that no one else has — or can.
Ashe participated earlier this week in a joint presentation with Walmart chief information officer Karenann Terrell at the Fortune Brainstorm Tech conference in Aspen, Colo. The pair took turns describing in the broadest of strokes some of Walmart’s strategic initiatives and the interplay between the company’s Bentonville, Ark., headquarters and the global e-commerce headquarters in San Bruno, Calif. However, it was Ashe who offered the vision of the role he sees Walmart playing in an increasingly digital world where Walmart is competing against the likes of Apple and Google to offer a high quality consumer experience.
“We have to integrate everything,” Ashe said, suggesting Walmart’s goal is to, “provide access and value to people around the world as it relates to products.”
Anyone interested in where Walmart is headed with its integrated commerce owes it to themselves to invest a half an hour and see what Ashe and Terrell had to said about Walmart’s digital future.
Walmart rant of the week, courtesy of Ad Age
July 26, 2013
Last week it was veteran retail analyst Walter Loeb bemoaning what he viewed as Walmart’s deteriorating store standards. This week Ad Age took aim at the company’s brand image.
In a piece by Simon Dumenco, he recounts how early shopping experiences at Walmart stores were an eagerly anticipated experienced. However, like Loeb Dumenco took a shot at the store experience and then when a step further.
“Beyond the increasingly unpleasant experience of shopping at Walmart is the subtext of shopping at Walmart — the crummy feeling I have about going there because of what's become of the chain's brand image,” Dumenco opined. “Basically, Walmart can't seem to stop getting caught attempting to shortchange its workers.”
Walmart opens e-commerce checkbook, again
Jul 25, 2013
Whatever a cloud-based Web site acceleration company is, Walmart acquired one this week called Torbit.
The retailer’s Silicon Valley innovation engine known as @Walmart Labs described Torbit as “a front-end optimization innovator that has been focused on making the web a faster and better place.”
Torbit is known for developing measurement, analytics and performance improvement tools to help companies identify and enhance their overall site performance.
“With Torbit’s Site Optimization technology, we will be able to optimize our website experience no matter where our customers are shopping – be it on a desktop, tablet or mobile phone,” @Walmart Labs said. “Torbit’s technology drastically minimizes the time customers spend waiting for a site to load by applying state-of-the-art optimization to the contents of the web page on-the-fly, as they are delivered to the customer's browser.”
Summer traffic swoon underway at Walmart.com
July 19, 2013 | By Mike Troy
Walmart.com is the only conventional retailer to rank in the monthly Top 50 Web Properties report from comScore Media Metrix, but June traffic to the retailer’s site was below year-ago levels even as e-commerce is hailed as the next growth engine.
Comscore showed Walmart.com with nearly 40 million unique visitors during June — no other conventional retailer is close — but even at that level the company is down from 43.1 million unique visitors during June 2012. Meanwhile, Walmart.com faces a high bar this month because its unique visitor totals have flatlined this year yet July 2012 was one of Walmart.com’s busiest months with 45.2 million unique visitors.
If Walmart is concerned about the traffic decline it isn’t apparent from the company’s comments. Digital efforts continue to be highlighted during prepared remarks released after quarterly financial results, during investor conferences and at the company’s annual shareholder’s meeting.
Walmart’s e-commerce business is likely to be in the spotlight next week too when Neil Ashe, president and CEO of Walmart Global eCommerce participates in the Fortune Brainstorm Tech conference in Aspen, Colo., along with Karenann Terrell, Walmart’s chief information officer.
Traffic is only one variable in the sales equation with ticket being the other and average transaction sizes are thought to be increasing at Walmart.com. Within the past year has begun to talk more openly about its sales, going so far as to forecast $10 billion in online revenue this year.
That figure is well short of Amazon.com, where comScore data also showed June and May traffic to be below prior year levels. Unique visitors to Amazon.com totaled 98.3 million in June and 108.3 million in May, compared to 100.7 million in June 2012 and 99.4 million in May 2012. Similar trends were also evident at eBay and Facebook.
Same-day delivery revolutionizing retail, not so fast
Jul 18, 2013
There are a wide range of experiments in the marketplace right now, and plenty of angst related to same-day delivery of products and consumer’s desire for more immediate e-commerce gratification. Walmart, Amazon and others appear intent on unlocking what is seen by some as the next big thing in retail, but an interesting piece by Fox Business bring a new perspective to whether shoppers care.