Walmart Adding Gun Sales at More Stores
Under
CEO Mike Duke, Walmart
is looking to revive
its business by going
back to "heritage" categories that helped it achieve success in
the chain’s
formative years. Among the products that Walmart is adding back to its mix
include fabric, fishing poles and firearms.
That last item has caught the attention
of numerous media outlets as well as those who advocate for gun owner rights
and others seeking tighter regulations.
Walmart plans to add rifles, shotguns
and ammunition to hundreds of stores. The goal is for Walmart to sell firearms
in about half of its U.S. locations. The chain began removing guns from many
stores about five years ago, eventually reducing firearms sales to about
a third of its locations. It does not sell handguns.
"We made a business decision to sell them in certain stores because we
have realized the appeal was perhaps broader than we thought," David Tovar,
a spokesperson for Walmart, told The Wall Street Journal. "But we are
committed to doing it as responsibly as possible, as always, in compliance
with all applicable local, state and federal laws."
Lawrence Keane, senior
vice president of the National Shooting Sports Foundation, said Walmart is
being smart by addressing the needs of a growing market.
"There are still
a lot of first-time buyers. The personal defense shotgun market is doing very
well," he told the Journal.
- Wal-Mart Adds Guns Alongside Butter – The Wall Street Journal
- Wal-Mart to return firearms to some U.S. stores – MarketWatch
- Walmart Brings Guns Back – CNNMoney.com
- Deadly
Force Now In Aisle 9: Walmart Returning Guns To Its Shelves – Fast Company - Why are more Walmart stores selling guns again? – The Week
- Firearm Sales Gaining Momentum – The Wall Street Journal
Discussion Questions
Discussion Questions: Is Walmart smart to go back to “heritage” categories if it wants to boost same-store sales? Will expanding the number of stores that sell guns work to its advantage?
I was most fascinated to see this news right next to another piece where Mr. Duke said Walmart’s core customer is “running out of money, due to the rise in fuel prices.”
If that’s true, is Walmart really doing the right thing by incenting its customers to buy firearms instead of necessities like food? Is that part of its moral imperative?
My observation here has very little to do with my opinions on gun control and a lot to do with observing the actions of a company that is supposed to be taking the high ground in sustainability, health and moral issues. Or maybe it believes that its core customers are killing their own food these days?
It strikes me that Walmart is sending very mixed messages to the marketplace.
I wish Walmart would reconsider the guns. It just doesn’t seem to be a category that belongs in a mass merchant that provides all the necessities of life.
Please don’t tell me that guns are a necessity.
I checked off “a little” because there was no option for “a teeny, tiny bit.” Presumably Walmart has investigated sales per square foot that can be generated from firearms versus other products that could take up that same real estate, and is now acting accordingly. But if doing so actually moves the needle on same-store sales, I’d be checking the store’s market area for the presence of militia groups or Taliban. I’m fine on selling guns (I shoot, but don’t hunt) but since the question is whether this will impact Walmart sales, the answer is “not really.”
Guns, fabric, and fishing–categories that most Walmart shoppers like to literally “shop.” This isn’t so much about Walmart going back to “heritage” categories as it is Walmart making a strategic decision to blow categories out that its customers prefer to touch, feel, and evaluate in the store. That these items currently are not widely purchased online makes the decision a perfect one-two punch for Walmart.
If you’ll pardon the obvious pun–it’s probably worth a shot.
Given what’s happening to Walmart’s comps–something has to be done.
The company is probably correct when it notes that its core target market simply has less disposable cash these days. They are after all the consumer segment nobody–especially the media–ever covers, the working poor.
So, if your core customer doesn’t have cash, or at the very least isn’t spending the cash they do have on what you are selling, and you can’t get replacement customers the only practical answer to is to keep tweaking the mix.
Going back to historical models may not, in fact, be the best way to do this. Setting aside all the gun control arguments for a moment, you have to ask yourself if there really are enough people out there who want a gun and can’t get one anywhere but Walmart to make a difference in the company’s performance.
I think the answer is a resounding “No.” Ditto for fishing rods.
That said, Walmart has to do something since it has to perpetually address analysts’ demands that aren’t rational on the topic of sustainable market share versus growth.
Whether selling rifles again is going back to “heritage” or not, Walmart has a need to increase like-store sales. Their current sales challenge is a new puzzlement for the Barons of Bentonville. So they are shooting for the moon with rifles and also telling the world they will meet everyone prices on every items they carry. Now that they have captured a massive share of retail sales in America, is Walmart approaching a point of diminishing returns?
Walmart has been embarking on a massive reversal of the failed business strategy known as “Project Impact” which was masterminded by Eduardo Castro Wright and John Fleming.
Project Impact, also known as “Sudden Impact” in some circles, will have a lingering large affect on the US business for at least another year.
Mike Duke’s announcement on the addition of “heritage” categories of business is further evidence that the company is seeking to reverse the impact that the strangling of assortments and elimination of core categories has had on Walmart. Their core customers (read Heritage customers) will take some time to be lured back to Walmart. Within general merchandise crafts, sporting goods and hardware, they have lost a large number of these core customers during over the last 5 years. It is going to take some time for Walmart to regain these customers’ trust.
Adding firearms back into the assortment alone won’t help reverse Walmart’s string of negative comps, however that along with other merchandising initiatives under Bill Simon including increased promotional merchandising efforts, the resurrection of Action Alley and the return of “heritage” categories of merchandise is essential to reversing the sales comp trend.
Carol’s insight is intriguing. I had not considered that and was prepared to talk about the issues of marketing, gun control, constitutional rights, etc., and Carol’s point really made me think. Interesting observation and hypothesis.
Selling guns is a mixed moral message, historical or otherwise.
I come from a hunting and shooting family, but the historical perspective on guns is changing as our culture shifts to places that are more fearful in terms of weapons overall. I’m not convinced Walmart cares about the moral fiber of its shoppers, and adding guns to please the analysts sends a very fearful message to Americans that may backfire in a big way.
Bringing back the “heritage” categories at Walmart is smart. Indeed, I thought removing them was a bad move. For many consumers in both suburban and rural areas, shopping categories like fabric, fishing poles and rifles at the local Walmart offers convenient access to the products they want and need to outfit their chosen lifestyles–and at a good price. If Walmart isn’t selling them, then that means purchasing the goods at a likely higher price point at specialty retailers.
Like every retailer, Walmart is in business to compete, not leave money on the table by refusing to sell the products the brand’s core shoppers want.
The personal defense shotgun market is growing very well? Really? I hadn’t considered a shotgun initially for that reason. Really.
I’ve never been a gun owner. I’ve never been a strong gun activist. I’ve never felt that those that felt strongly about them and are good and decent people should be prohibited from owning them. I have always felt that either a long gun or hand gun should be the most difficult purchase you could possibly make. I didn’t see anything in the reporting about that concern other than a casual mention that all the required paperwork and background checks will be done. A casual mention.
I am still apprehensive of guns, I have a strong fear of them. My mind is changing on ownership of one. The reasons are numerous. Nevertheless, Walmart wouldn’t be my choice of a retailer to purchase one. The fact that they don’t sell handguns makes that impossible.
Primarily, my desire for ownership is twofold, protection and sport (targeting). However, before ownership is the desire to be skilled prior to the purchase. Why wouldn’t Walmart be a retailer to consider? Here’s why. I want a professional, reputable gun retailer that offers much more than just a low price. I want one that will help me select the right purchase for a new owner. I want one that will guide me through safe handling, storage, and use–BEFORE I buy. I want one that will carefully guide me through the process of a concealed weapon permit. I want one with a range that will consistently teach me over time its proper usage. I want a retailer that will discourage the wrong purchase and guide to the right purchase. I want a retailer that respects the product for what it is–deadly.
It should be the most difficult and careful purchase and sale of any product.
Again, I am not personally an activist. I respect those that feel that they need to be. That’s not me. What I don’t see in any of this is the services and care that should go along with the sale of firearms. Missed opportunity for Walmart? You bet. Is there a message in that? You bet.
On a recent visit to my local retailer of choice, they were packed. Both the customers and the retailer had the same mind set as my own. If I do make the purchase it will be from a retailer that understands these products and sells them accordingly. They are not a commodity to be sold in the fashion of a loaf of bread, a six pack of Bud, and a yard of cotton.
I am with Carol on this. This is a strategic business decision, not a “feel good” by going back to “heritage.” These items are items people want to touch and feel before they buy. There isn’t a good online alternative to holding a rifle to your shoulder, feeling the balance of a fly rod, or palming the texture of a fabric.
I am with Warren on the effect of guns…tiny, tiny, tiny. Just like adding another incremental category to the store. If it wasn’t guns, this wouldn’t be news.
One feel-good note–no assault weapons. And, I am confident that Walmart will precisely follow the gun laws unlike many independent gun shops, sell guns with responsibility.
While everyone seems to be preoccupied with guns, I feel that the reintroduction of fabrics will have the biggest impact on the bottom line. Guns & fishing will have an impact, but Walmart, at best, will only stock 40 firearms SKUs. The local gun store stocks over 600. The fact is that many Walmarts never quit selling guns so sales will be accretive only to the extent that the 600 stores who add this category produce results. Now if they add handgun sales back into their stores, that could be huge. Anyway, fabric sales will be accretive for every store and have a much larger impact on the bottom line.
“The goal is for Walmart to sell firearms in about half of its U.S. locations. The chain began removing guns from many stores about five years ago, eventually reducing firearms sales to about a third of its locations.”
So they never actually left,and they won’t be in all stores (in the future): this is a minor, incremental change that isn’t even worth talking about.
The comment about selling guns and fishing rods misses one reason why they sell. Hunting and fishing puts protein on the table. It is not a waste of household resources but a supplement to the food budget.
Carol is right about the tactile impact the new goods will have on shoppers.
Guns are big ticket. Most range in selling price at $400+. With Walmart’s scale, they are very profitable at a discounted price. To Scanner’s point, you probably would not want to buy your first gun at Walmart. But knowledgeable owners certainly would buy subsequent firearms there. And it is not just the gun. There is the case, cleaning equipment, ammunition, targets, etc, which are all expendable commodities which brings the customer back again and again. All good margin business. It all adds to the share of wallet for customers already in the store, and a destination for those customers who are not.
Can’t believe Ben didn’t weigh in on this!
I received the following information recently: “There were more than 600,000 hunters this season in Wisconsin, which would be the eighth largest army in the world with more men under arms than Iran, France, and Germany combined. These men deployed to the woods of a single state to hunt with firearms, and no-one was killed.
Add the Wisconsin number to 750,000 hunters in Pennsylvania, 700,000 in Michigan, and 250,000 in West Virginia. The hunters in those four states alone would comprise the largest army in the world, and there are 46 other states where hunting is popular (Texas? Whew!). America will forever be safe from foreign invasion with that kind of home-grown firepower. Hunting – It’s not just a way to fill the freezer.”
Sounds like a lucrative market. WM will be selling to hunters and no handgun sales, so the cats out there of the “fraidy” and “scaredy” breeds can purr peacefully in their beds at night. And for environmentalists, experts agree that there are more game animals in the U.S. today than when our country was founded.
For those questioning the value of this market, check out the hunting-related sales at Meijer stores in Michigan and elsewhere (apparel, ammunition, coolers, camping supplies, packable food & water, outdoor cooking equipment, etc., etc., etc.). I consulted with Meijer on this market, and without revealing proprietary information, it’s “jynormous” (“humongous” seemed a little understated). I kid you not. WM would be irresponsible to their investors if they ignored this market.
There are a couple of issues here that have not yet been mentioned. The first is that Walmart is the largest sporting goods dealer in the U.S., by a very large margin. (3X Dick’s, which is #2.) The second issue is that guns and ammo are the fourth largest category in sporting goods, at 11% of the trade, behind only footwear, clothing and exercise equipment, the four categories that alone account for half of all the sporting goods trade.
Eliminating guns in the first place was a PC driven issue, not rational business. Of course, “not rational” means not driven by traditional business considerations, but by non-business, political issues. The worm is turning, not yet fully turned, for businesses to turn their attention to the needs and desires of the the people — the market, rather than those who confuse forcing the market (government) with market forces.
Let’s not lose sight of the fact that WalMart did not begin in metropolitan USA. Its first 1500 stores were rarely near a city of 100,000 population. It won Discount News’ “Retailer of the Decade” with stores in rural America and reached the unbelievable goal (then) of a hundred billion in sales without big city USA. These are the customers that Sam Walton worked so hard to cultivate that, Walmart walked away from when they lost direction. It is quiet possible that these customers will forgive them of their mistake and welcome them back with open arms. They understand the value of guns and fabrics. By the way Gene, if you ask any burglar whether he would rather face a 9mm Glock or a 12 ga pump shotgun in a dark hallway, I suspect he will take the Glock every time. Just something to think about when buying a gun for home defense.
A.W., not to speak for Gene, but I believe for most the concern over assault weapons has more to do with keeping them out of the hands of mentally ill individuals who have an unnatural desire to mow down people in public spaces. Sure, if “85% of all burglars agree” that shotguns are just as dangerous, I’m sure gun control advocates would be happy to recognize their superior expertise and add those weapons to the restricted list.
I do not believe the sale of guns in a typical retail outlet can do anything good for the safety of people. I am opposed to it. Once Walmart starts, can Target be far behind?
I don’t believe guns are defined as a necessity. Will Walmart then offer them at the lowest price? Shame on you, Walmart.
I reread every post and am shocked at the “politically correct” gun focus. I live in a rural area and frankly, Walmart has many items not readily available elsewhere. In my area, about 85% of the shoppers are female. The 15% who are male pretty much stay in the hardware, automotive, and sporting goods section of the store. Why would you focus your thought on 15% of Walmart’s customer base and ignore the dominant 85% of shoppers? Are you thinking for yourselves or running for office?