With all due respect…come on!!! Enough already with the, “They’ll learn to love us once they can be taught to hate Wal-Mart,” strategies. Where’s the “new hope” here? Let’s see: if you take shoppers who didn’t shop at Wal-Mart and get them to shop there they won’t want to shop anyplace else until you explain to them that they’re stupid for being duped by end-caps and that somehow the size of Wal-Mart’s PR budget ought to convince them to go back to a channel where THEY believe they are paying higher prices for the same quality and less selection. This is hope? And, as to the suggestion that all this could be delivered through an industry-level education program (which presumably could explain why those misleading hot deals on end caps are O.K. for supermarkets to stage but somehow show how Wal-Mart is ripping off the public) let’s remember that old adage about the pot calling the kettle black. Here’s a novel idea: why not just be better than Wal-Mart ala Wegman’s, HEB, etc? Consumers aren’t… Read more »

It’s interesting to note in the Zenith Research how consumers change their views on what is important when shopping after they’ve been going to Wal-Mart for awhile. How can retailers convince their current customers that everything they want (what is important) in the shopping experience can be found at their stores and they needn’t go looking in Wal-Mart or any other competitor’s location?

Wal-Mart is successful because they have demonstrably lower prices across the board than their competitors in comparable categories. This means they’re lower on music prices than stores that sell music, they’re lower on auto merchandise than stores that specialize in auto merchandise, and they’re lower on groceries than grocery stores.

Wee Willie Keeler was baseball’s greatest hitter in the beginning of the 20th century. When asked how he got so many hits he replied “mostly, I hits ’em where they ain’t.” Wal-Mart’s competitors have to learn where Wal-Mart ‘ain’t,’ like Wegmans in New York has, and HEB in Texas has. No one goes into a Wild Oats store and says “I could buy all this so much cheaper at Wal-Mart.”

What we do know is that much of what individual operators (with a few exceptions) have done to compete with Wal-Mart for the same consumer base has been hugely unsuccessful. Whether an “Other White Meat” approach might work for supermarkets, I don’t know. But, at least it’s different than the same old tired advice that is normally trotted out.

Each time I have shopped at Wal-Mart, I have left with trepidations. I have decided that the experiences I have had there prompted my decision not to shop there again.

This idea of a collective industry ad campaign to point out how Wal-Mart is deceiving the public is about as lame an idea as I have ever heard. First of all, trying to get a major group of retailers to band together on something like this is hard enough to fathom. Second it most likely would backfire and cause more people to discover how much they could save at Wal-Mart compared to most grocery retailers.

As has been pointed out on this forum, grocers need to learn from the Whole Foods, Trader Joe’s, and other retailers that are offering things that people want other than the lowest price. I’m not sure that it is impossible to beat Wal-Mart at the price game and image, but it is definitely a very low percentage opportunity that has spelled disaster for many other retailers already.

I remember the launch of ECR some 13 or 14 winters ago, as I’m sure do many of you. Some did very well with ECR, but not the supermarket retailers. For most, it was a distraction, something that suggested it was more important to look at the process of getting product to the consumer than to look at the actual consumer. Sure there were great things done in the name of ECR. It got the industry to at least consider the inefficiencies of the buy-side mentality that was predominant during the previous decade. And it did truly improve some logistics operations. But there was no $30 billion in savings , and ECR was not the panacea for the ailments brought on by the supercenter. More important, ECR didn’t address the behavioral issue the draws people to a Wal-Mart and away from the supermarket, and so it did not succeed (at least in the US). All of this is a long way to say that many, if not most, supermarket executives don’t understand that it’s all… Read more »

I agree with Ryan. If Wal-Mart’s hot end-caps are intended to trick customers, what do traditional supermarket retailers do that’s different?

Here’s an idea…once the Wal-Mart campaign has its impact, let’s run a campaign to let customers know that convenience stores sometimes charge more for the same product as supermarkets! And while we’re at it, why not let them know that much of what’s sold in dollar stores is not the highest quality. Brilliant!

Grocery supermarkets need to focus on what they have to offer and why customers should chose them instead of alternatives. If your best marketing message is an attack on your competition, you’ve already lost the battle.

Ditto on Ryan also. Seems to me grocers have already solved the Wal-Mart problem. Publix, HEB, Wegmans, Winco, Ukrops, Whole Foods, Trader Joe’s, Hy-Vee, Aldi, etc. are all doing great. Do we need new strategies? I don’t think so. Many grocery companies are doing just fine and dandy. Those who are not doing well — then too bad, you deserved it. The grocery industry does not want to have a collective will to develop an industry-wide response to Wal-Mart. Why should Wegmans help Albertsons figure out how to compete?

The grocery industry hasn’t had the collective will to develop an industry wide response to Wal-Mart…if that should be an industry objective. It lumbers along searching for the “hope” that consumers will eventually hate and abandon Wal-Mart and a Rainbow of Salvation will appear for supermarkets.

The grocery trade associations seem to go along with a “hope is eternal” mentality. But those retailers who are succeeding despite Wal-Mart competition are those that have a sharp focus on who they are, what they are doing for their target audience, and then executing very well every day. They are not imprisoned by the “low price” mentality; rather, they are energized by a superior service and top assortment paradigm. I never hear Byerly’s, HEB, Wegmans or a few others singing the blues about how Wal-Mart is devastating their business.

One of the things that most infuriates me about life in general at the moment is the approach that anyone/anything that is different has got to be bad or wrong. Why is it not sufficient to be different? Why have different people/things got to be denigrated and faulted? It is common knowledge that I am not a big fan of Wal-Mart and will respond to direct questions with lengthy explanations of my reasons. I am also lucky enough – and I use the term deliberately – to be able to stick to my guns on this and recently refused my mother’s well-intentioned introduction to the bargains and bounties to be had. But I am not sufficiently naive as to deny that many people need to buy based on price alone. The problems causing that situation are far more serious and insidious than the fact that Wal-Mart and others take advantage of it. That they may take advantage does not excuse a rebuttal based on behaving just as badly and stooping to their level. Finding a… Read more »

Wal-Mart is a great store for many things. Other grocery stores would have a hard time competing with them on pricing as they buy in such tremendous volume that they are able to secure a lower price. That and the fact that they demand an extremely low price from their suppliers or they will take their business elsewhere. Their shipping system is second to none. They excel in whatever they do. But the biggest problems with their model are that they really lack in customer service and they are out to succeed at all costs. Take the eminent domain issues in Alabaster, AL, etc. That sort of stuff turns the public off when they find out about it but the bottom line for the consumer is their pocketbook. The way to succeed over Wal-Mart is make yourself better where they lack. Customer Service is the number one place to start. Publix does excellent in this area. With their 10 second rule, where you have to vocally acknowledge the customer within 10 seconds of entering your… Read more »

Would you like to know what I like about Wal-Mart? It’s their automobile service department. For years I wouldn’t have been caught dead in a Wal-Mart but one day I found myself in a position of having to use their service department to repair a tire that was quickly going flat. I watched them work on the tire and they did a very thorough job. I watched them remount the tire and marveled at the fact that they checked the lug nuts with a torque wrench twice. I have spent a lot of money on cars and service over 50+ years and have NEVER seen this kind of detail discipline anywhere. Due to their discipline, I will not take my cars to anyone else for any services that I can get at Wal-Mart. While waiting for oil changes, rotations, etc. I became acquainted with the rest of the store and have found branded product at very reasonable prices. In addition I have found a no quibble return policy which assumes the customer is right 100%… Read more »

It appears from the comments and responses that it is as simple as the fact that there is Wal-Mart, and then there is everyone else. This is as untrue as it is to assume it would be possible for the grocery industry to have a collective will in the first place. There is simply no foundation for either argument. Take a few facts. Wal-Mart certainly is large. However in most cases, they themselves claim the inability to achieve higher than a 30% market share in any given market. Now, granted that’s an astounding share. However, in all the auto talk these days, due to the opening of the auto show in Detroit and the woes of GM and Ford, there is a clamber about the Asian auto makers being able to achieve a combined (yes, combined) 36% market share. If in fact Wal-Mart can claim a 30% share, that’s great, however there is 70% left for others at multiple levels. That’s tremendous opportunity and a tremendous amount of activity. None of which is being accomplished… Read more »

I don’t agree that competing with Wal-Mart on price is a winning solution. Rather, that is suicide. Those consumers in the study had not placed price #1 before shopping at Wal-Mart as part of the study. Price is not #1 for all consumers. What is? Do you offer it? Do you offer something of value that YOUR consumers are willing to pay for? If not, you will lose them if not to Wal-Mart then to someone else.

Ryan has it right.

I agree with Ryan and Kai that it pays to learn from the supermarkets that thrive regardless of Wal-Mart. Shoppers aren’t foolish. Since grocery shopping is repeated every week, shoppers have over 52 times a year to learn about their supermarket’s capabilities. Any lesson repeated 52 times a year will be learned, that’s for sure. The key issue: are shoppers’ learning skills better developed than retailers’ learning skills?

Wal-Mart has built its success on price and selection. To compete, grocers cannot ignore these, but instead have to go to a more aggressive pricing campaign, with a better selection, including house brands (which Wal-Mart does very well with). This is the only way to become successful at competing with Wal-Mart. Anything short of this is ignoring the elephant in the room. There are many failed attempts at trying to become a hi-lo, EDLP hybrid in the grocery industry. The key here is to emulate the pricing and house brands which Wal-Mart has shown to be successful in their model, and then to offer the regional selections and clean stores which consumers want (like a Trader Joe’s, Whole Foods, or Wild Oats offers in their models). This will secure the success of the model while ensuring a unique, competitive model.

Why do we persist in treating Wal-Mart as an entity outside the grocery industry? Shoppers, according to data presented at the last IIR Shopper’s Insight conference (July ’05), are going to Wal-Mart for grocery or for general merchandise, not for both. Those shopping for grocery treat Wal-Mart as another grocery store. I’m not sure this is any different from any other EDLP chain, except that Wal-Mart does it better than most. This would suggest that a negative campaign will either be limited in effectiveness (because they have rarely worked against EDLP chains) or may backfire. If nothing else, someone should test this before a major effort is exerted.

I’ve been researching Wal-Mart supercenters for over 8 years, and I keep coming back to the same conclusion. Independents like me either change or die!! Our new supercenter, 4 miles from me, opened in April 2005, and from the very beginning, I priced checked their perishable perimeter. Guess what??? Over 90% of Wal-Mart’s meat prices were higher, not to mention the fact that I’m carrying U.S. choice custom cut meats, and who knows where their meat comes from. The deli is a wasteland of big chunks of meat stacked at ordinary prices, and produce is not discounted either. If you need a plan to survive, I believe that superior quality must be the objective. Wal-Mart is giving you a built-in advantage in those areas, including bakery, so spend your time enhancing selection and quality in the perishables. Our store put in a new old world oven that produces the premium crusty breads, and we have increased sales in our bakery by 40% vs. Last year. After the initial hit, our meat business all came back,… Read more »

David, thanks for the tip. Even so, that leaves at least $350 billion in just the remaining top 50 Supermarket retailers. So, give Wal-Mart another $5 billion to cover the areas you’ve mentioned and it still amounts to only 10% of the market of the Top 50 Supermarket retailers. That leaves out all of the independent supermarkets and other retailers competing in the market place. Wal-Mart’s big, yes – I will give you that. But the remaining market is substantial. From my view, there is a tremendous difference between being big and being great. There is a tremendous amount of success being achieved elsewhere with little mention. Wal-Mart simply is the current beneficiary of “any publicity is good publicity.” What’s going on elsewhere in the meantime is that great competitors are being born and developing that will change the way consumers shop in the future in ways we have yet to think of – well, maybe heard of.

Scanner: Typically, grocery sales at Wal-Mart are very understated. They typically only quote “grocery department” sales and not grocery comparable sales that include HABA, pharmacy, pet products, baby products, etc. Kroger and other grocery companies have those items included in their sales.