Surveys Say Wal-Mart’s Strong/Weak Holiday Season

Discussion
Oct 13, 2010

By George Anderson

Will this be the best of times or worst of times for Wal-Mart
Stores? Two research studies reported on by Bloomberg News this week
point to two distinctly different scenarios for the retailer this holiday season.
It’s not hard to guess the one that stakeholders in the world’s largest retailer
hope will prove true.

An article on Monday cited a survey conducted by Consumer
Edge Research, which found consumers who plan to do more shopping at the chain’s
stores this holiday season exceed those who were looking to do less by 22 percent. 

“While consumers are indicating they will be spending about as much
on the holidays this year as they did last year, they are also indicating they
will be increasing their holiday shopping at the discount retailers, likely
to seek out the best deals possible,” Bill Pecoriello, an analyst with
Consumer Edge, said in the report.

Another study from Cleveland Research, however,
said that changes made by the retailer under U.S. chief Bill Simon have failed
to reverse the sales slide of recent quarters due to poor in-store execution
and failure to explain the benefits of the changes made to consumers.

“Sales have drifted south again over the last couple months, and the
outlook for the fourth quarter is now more questionable,” said Jeff Stinson,
an analyst with Cleveland Research, told Bloomberg. “We are less
optimistic that the business will inflect favorably in time for the holidays.”

Wal-Mart
Stores, which is holding its annual investor day today, declined to comment
on Cleveland’s findings when contacted by Bloomberg.

Discussion Questions: What is your reaction to the studies by Consumer Edge
Research and Cleveland Research and the conclusions drawn about Wal-Mart Stores?
Is it possible that the conclusions of each study could be right?

Please practice The RetailWire Golden Rule when submitting your comments.

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10 Comments on "Surveys Say Wal-Mart’s Strong/Weak Holiday Season"


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Gene Hoffman
Guest
Gene Hoffman
10 years 7 months ago

Research studies are not necessarily results or reasons. Wal-Mart is currently a bit off-pace but they know they can’t let that continue. My “research” tells me that WM will do better this coming season by powering their merchandising efforts to accomplished that result.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
10 years 7 months ago

Continued uncertainty in the economic outlook and assortments back to pre-sku rationalization levels will result in modest increases, even if consumers spend slightly more or less overall than last year.

Marge Laney
Guest
10 years 7 months ago

I agree that holiday shopping will increase this year and the discounters will get more than their fair share of the business.

Walmart hurt themselves with their SKU rationalization program earlier this year that sent their loyal following looking for their favorite brands elsewhere and some have not returned. But, this is Walmart we’re talking about and their merchandising prowess and low prices are hard to beat.

I predict they will get their groove back this holiday season by luring the consumers with long lists to fill and a little more confidence to spend their money.

David Livingston
Guest
10 years 7 months ago

I predict Wal-Mart will have higher overall annual sales than the year before. Same store sales are meaningless because Wal-Mart has been on new construction building craze along with doing remodels, therefore causing healthy cannibalization.

As for holiday sales, Wal-Mart always does well. The economy is exploding right now and we are all enjoying a fabulous recovery. I don’t understand the point of such studies. If you are a good retailer, the economy is always good and sales will go up. Poorly run retailers’ sales will go down. We don’t need studies to tell us that.

Bill Emerson
Guest
Bill Emerson
10 years 7 months ago

Given the potential impact of the election on the business (read hiring) community, it’s almost impossible to figure out what the holiday season holds on an aggregate basis. That said, my vote is that WM will have a a very solid performance.

Ed Rosenbaum
Guest
10 years 7 months ago

Research studies sometimes will only give you reason to discuss the issues. My “research” tells me this season will be slightly better for the Wal-Mart and similar value stores than last season. The reasons are the economy, despite what the administration wants us to believe, is not any better for the average American than it was last year (Wall Street not included as average Americans).

The shoppers want to buy. But the items have to be affordable and within budget. The shopper still remembers the past few years of belt tightening that they did, and do not want to take risks by over spending.

Gene Detroyer
Guest
10 years 7 months ago

The central question is not what consumers are telling you what they will do, but what they are doing. Bloomberg.net (Oct. 7) recently reported, “Consumer borrowing declined in August as Americans trimmed credit-card balances…Credit declined by $3.34 billion after falling a revised $4.09 billion in July, more than the previous estimate, according to a Federal Reserve report released today in Washington. Credit-card debt decreased for the 24th consecutive month.”

If the trend continues, the bet for the Holiday Season is that shoppers will trade down. If shoppers trade down, Wal-Mart wins.

Carol Spieckerman
Guest
10 years 7 months ago
I see a rebound taking shape for Walmart that will actually start during the holiday season and gain traction in Q1 ’11. My prediction is based on a number of factors: 1. Agility – Walmart has gotten pretty good at quickly deploying course correction strategies and tweaks. (Did you notice just how fast those pallets began hitting “inaction alley” once Duke’s dictum hit?)2. Accountability, Part I – The psychology of Walmart’s recent reversals may seem schizophrenic but there’s a method to the madness (as always). By springing it on the merchants, that they’ve regained power after months of marketing mayhem then, in true Walmart fashion, following up with a dose of don’t-look-back-or-dwell messaging, Walmart has at once ignited the troops . . . and made them fully accountable for turning everything around. That’s powerful sauce.3. Accountability, Part II – Ditto vendors. “We’re bringing back more of your stuff, just like you wanted. You’re going to do everything possible to make sales happen, right?”4. Brand Refreshes – As much has been made about the brands taken… Read more »
Craig Sundstrom
Guest
10 years 7 months ago

Neither of these studies–if we should even call them that–impress me much: the second simply extrapolated the past few months into the next few, while the first, though more innovative, has the problem that people often don’t do what they say they are going to do (not to mention that those who claim they are going to buy more don’t necessarily average the same as those saying they will buy less, etc.).

How will WM actually do? Like the economy as a whole, incrementally better than last year…good enough that wags can claim the economy is “exploding,” but poorly enough for many to foresee doom.

Kim Barrington
Guest
Kim Barrington
10 years 7 months ago

The shopper will go where the tech buys are. If Wal-Mart has purchased properly and they have good buys, then they’ll do okay. Their customer is worse off than those who are benefiting by stores restocking their shelves, don’t forget that.

But the winner this season will be eCommerce, including Wal-Mart online. Don’t forget this piece of the puzzle. If they have toys that I (or the mom in this case shopping for her kids for Christmas) know my kids want and they are priced right, I will buy them online vs going into the store this year because I am working two jobs just to make ends meet.

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