• The Wall Street Journal reports this morning that Wal-Mart has managed to dominate the Dallas grocery market to the extent that it collects $1 out of every $3 spent on groceries in the marketplace.
“As Bentonville, Ark.-based Wal-Mart increasingly turns to big cities as its last untapped market for growth in the U.S., the reverberations from the retailer's dominance in Dallas-Fort Worth provides a glimpse of what might await other urban centers -- Chicago, Los Angeles, Seattle, among others -- where Wal-Mart has yet to establish itself as a major player,” the WSJ reports. “Some aspects of Wal-Mart impact in Dallas-Fort Worth defy long-held assumptions: Retail wages in the so-called metroplex do not differ much from those in similar markets. And others provide amplified examples of Wal-Mart's impact elsewhere: Dallas-Fort Worth shoppers have flocked to Wal-Mart for low prices, earning Wal-Mart a 32.1% share of the grocery market and relegating former leader Albertson's Inc. to third place with 13.8%, according to TDLinx. Meanwhile, competitors are scrambling to get out of Wal-Mart's way by tailoring their fare to upscale customers or, in at least one case, exiting the mainstream grocery business entirely.”
Wal-Mart’s dominance is only likely to grow, the Journal suggests, since it will continue to build stores and Albertsons grows steadily weaker as the company changes hands.
As for the competition, the Journal reports that “Safeway so far has converted seven of its Tom Thumbs in Dallas-Fort Worth to its ‘Lifestyle’ format, including wood-plank flooring; earth-tone tile; an expanded floral section; sample stations for Safeway's private-label soups and meats; made-to-order items such as hot panini sandwiches in the deli; and a sushi preparation table within shoppers' view. Safeway intends to convert 20 additional stores in the market this year.
“Kroger has remodeled 50 of its 80 stores in Dallas-Fort Worth to its ‘Signature’ format. That entails surveying residents near the store regarding what merchandise and amenities they prefer. Among the items Kroger has installed in various stores: an enclosed play area for children; expanded wine sections; additional organic-food categories; seating areas for customers who want to eat in the store; and a sushi-preparation table.”
Meanwhile, Ron Johnson, CEO of Minyard Food Stores, tells the Journal that he “plans to spend $80 million to $100 million over five years to convert the entirety of his Dallas-Fort Worth chain into Latino supermarkets.”
• In the UK, Wal-Mart owned Asda Group has been fined the equivalent of $1.4 million (US) in a case where it was found guilty of trying to bribe warehouse employees into voting against unionization. The company reportedly offered its workers a 10 percent raise if they would against recertification of the union.
Asda says it may appeal the ruling.
“As Bentonville, Ark.-based Wal-Mart increasingly turns to big cities as its last untapped market for growth in the U.S., the reverberations from the retailer's dominance in Dallas-Fort Worth provides a glimpse of what might await other urban centers -- Chicago, Los Angeles, Seattle, among others -- where Wal-Mart has yet to establish itself as a major player,” the WSJ reports. “Some aspects of Wal-Mart impact in Dallas-Fort Worth defy long-held assumptions: Retail wages in the so-called metroplex do not differ much from those in similar markets. And others provide amplified examples of Wal-Mart's impact elsewhere: Dallas-Fort Worth shoppers have flocked to Wal-Mart for low prices, earning Wal-Mart a 32.1% share of the grocery market and relegating former leader Albertson's Inc. to third place with 13.8%, according to TDLinx. Meanwhile, competitors are scrambling to get out of Wal-Mart's way by tailoring their fare to upscale customers or, in at least one case, exiting the mainstream grocery business entirely.”
Wal-Mart’s dominance is only likely to grow, the Journal suggests, since it will continue to build stores and Albertsons grows steadily weaker as the company changes hands.
As for the competition, the Journal reports that “Safeway so far has converted seven of its Tom Thumbs in Dallas-Fort Worth to its ‘Lifestyle’ format, including wood-plank flooring; earth-tone tile; an expanded floral section; sample stations for Safeway's private-label soups and meats; made-to-order items such as hot panini sandwiches in the deli; and a sushi preparation table within shoppers' view. Safeway intends to convert 20 additional stores in the market this year.
“Kroger has remodeled 50 of its 80 stores in Dallas-Fort Worth to its ‘Signature’ format. That entails surveying residents near the store regarding what merchandise and amenities they prefer. Among the items Kroger has installed in various stores: an enclosed play area for children; expanded wine sections; additional organic-food categories; seating areas for customers who want to eat in the store; and a sushi-preparation table.”
Meanwhile, Ron Johnson, CEO of Minyard Food Stores, tells the Journal that he “plans to spend $80 million to $100 million over five years to convert the entirety of his Dallas-Fort Worth chain into Latino supermarkets.”
• In the UK, Wal-Mart owned Asda Group has been fined the equivalent of $1.4 million (US) in a case where it was found guilty of trying to bribe warehouse employees into voting against unionization. The company reportedly offered its workers a 10 percent raise if they would against recertification of the union.
Asda says it may appeal the ruling.
- KC's View:
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Sounds like a subtle bribe to us.
Hard to Wal-Mart to argue that it is changing its stripes when stories like these pop up.
