Carol Spieckerman

Wal-Mart Taking Hits Over Price, Selection

March 9, 2010

FROM RETAILWIRE:
Two separate articles conclude that Wal-Mart Stores is having a tougher go of it since the economy began to rebound, in part because a wide variety of competitors have found ways to beat the world's largest retailer on price. Do you see Wal-Mart as being more vulnerable to competition today than in the past?      [more...]

I don't see Walmart as being particularly vulnerable for a few reasons:
1. International presence and diversification. Walmart's international growth is currently offsetting domestic dips. Target is still make-or-break in domestic markets.
2. Newfound nimbleness. I have heard that Walmart is concerned about going "ditch to ditch" on rationalization; however, course corrections will be relatively easy to execute. Buy more.
3. Dollar stores and hard discounters are not a new threat and there have always been shoppers for whom Walmart is a luxury; Walmart is by no means the bottom of the barrel and they have not positioned themselves to be. For some shoppers, the tiers start with garage sales and flea markets then move up to dollar stores and to Walmart for special occasions.

Target has done a terrific job of shifting its messaging to value both in-store and in national marketing and their new focus on food is obviously paying off in more traffic and encouraging shoppers to look around a bit more. After waves of restructurings that will impact every aspect of Walmart's operation from sourcing, to online, to in-store marketing, I believe that Walmart may be getting its sea legs back in short order. Counting them out would be foolhardy.