Published on: October 8, 2003
We continue to get email on the evolving tendency of Wal-Mart Supercenters to house other retail businesses, including beauty salons, optometrist offices, tax preparation offices, McDonald's franchises, and now even Krispy Kreme doughnut shops.MNB
user Paul Schlossberg wrote:We recall visiting an Auchan "superstore" in Tours, France. There was a mini-mall inside the main entry, before you reached the Auchan store itself. We found a variety of small shops in the forecourt area. These stores were able to draw from the traffic coming to (or leaving) the Auchan store - and we noticed that some of the stores/services seemed to be doing good business.
We recall a similar situation at a very appealing Vendex supermarket in a suburb of Rotterdam - although there were fewer stores at this location.
Both of these stores were visited when I was working extensively in Europe in 1998. Looking back to 1998 shows that this is not exactly a new idea. Integrating the other retail brands into the store is a good idea. It brings other brands and/or services to the shoppers at the location. This is how to create sales - call it new consumption if you wish - or call it stealing share from other retail outlets.
We wrote yesterday about a piece in this week's Advertising Age
about the "challenges faced by retailers of all sizes as they square off against Wal-Mart, the discount colossus that has become the national market leader for everything from health supplies and beauty aids to women's clothing and groceries." Ad Age
cited the case of Oklahoma City's Budget Food Market, which is surrounded by 10 Wal-Mart Super Centers, six Wal-Mart discount stores, seven Wal-Mart Neighborhood Markets, and four Sam's Clubs. How does it compete? By doing what Wal-Mart doesn’t do, and by being what Wal-Mart isn't, including selling fresh cactus, daily baked tortilla and other low-priced and frozen Mexican specialties, as well as cashing checks and selling money orders.
user responded:The KEY to capitalism is where can a company garner the greatest number of profit dollars? Wal-Mart is winning hands down against anyone else. How much profit is in fresh daily baked tortillas or cashing checks vs. the work involved?
Your letter suggests there is no room for anyone but Wal-Mart. We cannot accept that scenario.
We're always writing that the key to survival is being where the customer wants you, how the customer wants you, when the customer wants you, and at a price the customer thinks is appropriate. One MNB
user observed:How long do you think it will be before the corporate giants finally understand that? I know this is something that you have been saying for a long time, and it certainly makes sense. Why can't they see it? Or will it take the demise of many to finally get them to see the light? As my mother would say, "It's as plain as the nose on your face". Why don't they get it?
Oh, they get it. They just can't do it, or don't choose to, because they are so focused on lowest common denominator marketing.
We had a story yesterday about coming grocery wars in Medford, Oregon, and the fact that local retailers actually are embracing new competition from Wal-Mart, saying that it demonstrates the opportunities available in the market and its broadening appeal to consumers. They seem to feel that Wal-Mart will serve as a kind of magnet for shoppers, and that they will be able to take advantage of the increased traffic.MNB
user Mitch Pallotta responded:It's interesting that one of the local retailers who "embrace" Wal-Mart's Superstore arrival is Harry and David Country Store. Harry and David (part of Bear Creek Corporation) sold Wal-Mart the property that they plan on building on....
Also regarding general competition from Wal-Mart, one MNB
user wrote:The retail business has a low barrier to entry and if Wal-Mart gets too greedy after wiping out substantial competition there will be upstarts to keep it honest, so long as these upstarts can coerce the suppliers to comply with the federal Robinson-Patman Act and give them comparable pricing and service. At the time my father closed his independent drugstore the promotional retail prices at the discount stores were often lower than his wholesale cost. Difficult to compete under that scenario.
user filed this report:I shopped a Wal-Mart in Orange County, Ca. this weekend. Jammed with customers all complaining about the narrow aisles in this 100k sq ft monster.
All were enjoying the low prices . Reminded me of Gemco in the 70’s without the food. OOS (out of stocks) were high. Store looked over shopped. Did not stop the perceived snobby Orange County crowd.
We mentioned in yesterday's sports report that the Indianapolis Colts defeat of the Tampa Bay Buccaneers Monday night was being described as one of the greatest football comeback wins of all time. Needless to say, not everyone agreed:As impressive a victory as it was, the honor of the greatest comeback in a professional football game still belongs to the Buffalo Bills. Led by backup QB Frank Reich, filling in for an injured Jim Kelly, the Bills fell behind 35-3 in the 3rd quarter of the 1992 AFC Wild Card game. Taking the game to OT, the Bills win on a Steve Christie field goal, 41-38.
Notes: current Bills Coach Gregg Williams was on the Houston sideline in 1992 as a coordinator.
Frank Reich also holds the record for the greatest comeback in NCAA history, leading the Maryland Terrapins past the Miami Hurricanes 42-40 after trailing 31-0.
Truly an inspiration for any retailer going up against seemingly unbeatable competition...