Shop Talk
Retailers, consumers and prices
Retaining the “new” Wal-Mart Moms
In the first two months of this year, Wal-Mart increased its share of the U.S. retail market by more than a full share point compared with same time a year ago, according to a new study from retail consultancy Customer Growth Partners. (Read about their strong February sales results.)
In January and February Wal-Mart’s U.S. business rang up $44.64 billion of sales — representing 9.7 percent of total estimated U.S. retail sales, excluding auto/food services. That is up from last year, when its January and February U.S. sales were $42.02 billion, or 8.6 percent of total U.S. sales, according to CGP.
For an industry where market share changes ”normally occur on a glacial pace,” Wal-Mart’s rate of market share growth is astounding, said CGP president Craig Johnson.
According CGP, the recessions of 1974, 1981 and 1991 witnessed a similar trade-down phenomenon, which provided a temporary boost to traffic at discount retailers.
“The problem was that once the economy recovered, the customers returned to their regular favorite stores, contributing to the long-term decline of older discounters such as Bradlees, Caldor’s and KMart,” CGP said.
Now, the challenge is for Wal-Mart to keep those new, higher-income customers when the economy improves, and to do so, it is following a six-pronged strategy, according to CGP.
“Clean, bright, easy-to-shop stores are essential to enhancing the in-store experience for customers of all stripes—and nothing will turn off today’s new generation of Wal-Mart Moms faster than encountering the kind of dingy, older Wal-Mart that their mothers, or grandmothers, used to shop at,” according to CGP.
Winds blow in retailers’ favor
This Thanksgiving shopping weekend, the weather may be one element not giving retailers a headache.
Retailers are geared up for the crucial three-day Thanksgiving shopping weekend, and many have already slashed prices to kick-start sales and rouse wary shoppers into spending mode.
While this holiday sales season could be the worst in years as declining home values, higher food prices, a credit crunch, and rising unemployment curtail consumer spending, weather tracking firm Planalytics has some good news for retailers — it predicts that most major population centers in North America should experience favorable weather conditions during the Thanksgiving weekend.
In addition, the current cold weather in the Midwest and East Coast have put consumers into a holiday mindset earlier than last year, Planalytics said, boosting demand for seasonal items.
“While, for some areas, snow flurries and precipitation events are likely over the weekend, they will reinforce to consumers that the holiday season has arrived,” Planalytics stated.
There could be some ”traffic limiting” events in the Midwest and Great Lakes as weather systems resulting in a wintry mix could keep people close to home, the firm said. But it said the Southeast should experience seasonal conditions, and the eastern half of North America should anticipate strong demand for seasonal items like scarves, hats, gloves, sweaters, skiwear, soups, hot beverages, and lip care.
Planalytics also said the overall trend in the West supports favorable demand for seasonal apparel and consumables, such as food and household cleaning products.
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Resident Shop Talk Expert
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I’m not sure these new shoppers at Wal-Mart are going to stick with it. Yes, it’s a quick, cheap fix, but in the long run, I think consumers understand that Wal-Mart has a net negative effect on the America economy. It comes back to the “low prices and high cost” theme.