Should Walmart open its own dollar stores?
It’s been more than a decade since former Walmart CEO David Glass identified dollar stores as the biggest threat facing Walmart. Over that time, Walmart has been rumored as a potential suitor in the market to acquire Family Dollar (it didn’t, Dollar Tree did) and even toying with the idea of creating its own dollar concept.
The very question of whether Walmart should be in the dollar store business was put to current CEO Doug McMillon at the company’s annual shareholders meeting. His answer was no. The reason? “We can’t do everything,” he was quoted by TheStreet website as saying. Walmart ended its Express small-store concept, seen by some as its answer to dollar stores, earlier this year.
One thing Walmart can do is play the pricing game that led to becoming the largest retailer on the planet. The company has emphasized getting back to its roots (lower prices) since Mr. McMillon took the helm in 2013. Since that time, Walmart has engaged in becoming more efficient across a number of operational areas, all with the stated intention on passing some of the savings onto customers.
Just last week, the retailer’s planned pilot using drones in distribution centers was identified as a possible means to further reduce the cost of goods. The company also recently announced plans to roll back prices on goods following the modification of its Savings Catcher price-matching program.
Still, the chain that might well be called the Walmart of dollar stores, Dollar General, continues to increase store traffic and sales. The chain, which has over 12,700 U.S. stores, achieved a two percent-plus gain in same-store sales in its first quarter.
- Why Walmart Will Never Be a Dollar Store – TheStreet
- Should Walmart acquire Family Dollar? – RetailWire
- Walmart to end price matching in some stores, but not really – RetailWire
- Will drones make Walmart’s DCs hum? – RetailWire
DISCUSSION QUESTIONS: Do you see Dollar General as a bigger competitive threat to Walmart than other rivals such as Amazon.com, Costco, Kroger and Target? Is Walmart’s competitive response to the dollar store threat satisfactory or do you think it needs to take other steps, possibly opening its own stores, to address the situation?