Recessionary darling Walmart saw the first down sales quarter in its
history and a surprisingly weak top-line over aggressively expanding
dollar stores and hard discounters. Additionally, last year it lost
modest market share in package-goods sales for the first time since
Information Resources Inc. began tracking the data -- while
supermarkets, dollar and club stores all gained, according to
Advertising Age dated March 8, 2010.
Despite its hard-hitting "Save money. Live better" ad campaign and recent ads claiming Walmart can save shoppers $55 a week compared to supermarkets, Target recently beat Walmart in a nationwide head-to-head price comparison, and a recent survey by WSL Strategic Retail showed that three-quarters of dollar-store shoppers believe those stores are cheaper than Walmart.
Kantar Retail's Management Ventures, Leon Nicholas began a competitive
pricing-tracking survey last year covering 40 items at Target and
Walmart, with the former beating Walmart in two of the three surveys so
far. Taken every six months, the latest comparison released last month
showed Target besting Walmart by 2.5%, or $7. It marked the first time
it underpriced Walmart in each of three departments -- edible,
non-edible dry grocery and health and beauty. Walmart actually raised
prices on average across all three segments from six months ago, Mr.
Nicholas said, while Target cut prices in health and beauty and
non-edibles while raising them in edible grocery.
Advertising Age has the Same-Store-Sales-Growth.
One of Walmart's challenges is that while it's benefited from trade down, it's also being hurt by its own shoppers trading down to dollar stores, hard discounters such as Aldi and Super Valu's Save-A-Lot and even Goodwill thrift stores.
Dollar stores generally carry a far more limited assortment than Walmart or supermarkets, and Family Dollar has announced plans to increase the private-label share of its sales from 19% to 25%. Hard discounters such as Aldi, Save-A-Lot and Winco (another fast-growing player in Western states) carry predominantly private labels and have long been the bane of brand marketers in Europe, where they played the key role in driving Walmart Stores out of Germany.
Some suppliers believe Walmart's efforts to cut assortments may be contributing to its troubles. The effort has knocked some local and regional brands off shelves, which can put Walmart at a disadvantage to local supermarket competition. And assortment remains a primary differentiator between Walmart and clubs, dollar stores and hard discounters.
Note: As a contributor to GroceryGuide.com grocery data, Target's prices have recently been lowering for non-grocery items, and products are being packaged in double packs and larger-than-normal containers bringing the cost per unit lower. Walmart doesn't regularly distribute an ad making it difficult to price compare. GroceryGuide.com has a sampling of Walmart's everyday prices.
Dollar stores have good prices on non-grocery items such as toothpaste, toothbrushes, hair care and body wash. And most accept coupons.
Go to GroceryGuide.com to do your own comparisons. Who is your price leader?