Peanut butter, pasta, snacks, baking mixes and condiments are among items offered at significantly lower prices than branded products. Over the past year, Wal-Mart piloted approximately 50 items in a couple hundred stores and now has expanded distribution to more than 2,500 stores, according to a company representative.
“In an environment where customers have so many choices about where to shop and how to buy, and many of them are feeling pressure on their budgets, we have to be at our best,” said Doug McMillon, president and CEO of Wal-Mart Stores, Inc., during an Aug. 14 conference call with financial analysts to discuss second-quarter earnings. “That’s why it’s so important for us to deliver a compelling customer proposition of low prices and quality service for every transaction.”
Price First is one way in which Wal-Mart Stores, Inc. is adapting to changing consumer needs. Smaller-format stores and e-commerce platforms represent additional areas of focus for the retailer. Challenged by price investments and reduced SNAP benefits, Wal-Mart US reported flat comparable performance for its food business during the second quarter.
“Stronger sales in the US businesses would have helped our profit performance in the quarter,” McMillon said. “We can get better operationally, and we will.”
Turnaround efforts include the recent announcement of a new leader for Wal-Mart US Greg Foran in July was promoted to president and CEO of Wal-Mart US, succeeding Bill Simon, who had been in the role since June 2010 and will transition out of the company.
Wal-Mart also continues to invest heavily in its e-commerce business, which posted double-digit growth in the United States during the quarter, outpacing the e-commerce market overall.
Wal-Mart recently began the roll-out of a global technology platform with streamlined search and navigation functionality that personalizes the user’s experience. The company also launched its Savings Catcher program nationwide, which automatically matches competing retailers’ prices and delivers a rebate to customers via a mobile app. And an improved checkout process is also on the way, executives said.
“Because the lines between digital and physical retail have blurred, we must be nimble to adjust so that we can exceed customer expectations,” McMillon said.