retail news in context, analysis with attitude

Bloomberg reports that Walmart is overhauling its automobile maintenance centers, looking to "improve the experience and entice more customers" by "dedicating staffing and training programs to the department" and hiring assistant managers with responsibility for the category.

Burt Flickinger, managing director at Strategic Resource Group (and someone who MNB views as being the ultimate authority on pretty much all things retail), notes that by doing a better job of marketing the centers and then providing a higher service levels, Walmart not only will be able to get more revenue out of the category, but also get more sales out of people who shop the stores while waiting for their cars.

“It’s shocking that prior Wal-Mart leadership didn’t identify this as an opportunity to capitalize on, especially since they’ve invested in all the other key captive consumer areas -- from vision care to pharmacy,” Flickinger tells Bloomberg.


Crain's Chicago Business has a story about how "a small move from Wal-Mart Stores is giving packaged-food companies a big headache. The retail giant has tweaked its promotional strategy, ditching some in-store product displays that put popular brands in front of consumers at the end of aisles and near cash registers. In turn, Wal-Mart is asking suppliers to take money they would have invested in displays and promotions and instead pour it into cutting the cost of their products as the company reverts to its 'everyday low prices' mantra."

Some suppliers are fighting back, the story says. Mondelez, for example, "has been in discussions with Wal-Mart to come to a compromise and promised to plow more money into its marketing support teams that work with Wal-Mart on in-store displays and promotions."

The suggestion is that while Walmart is making these moves in order to reverse a slow but immutable decline in sales and profits, CPG companies can argue that their presence on Walmart's shelves and in promotions drives traffic and sales ... and that Walmart should be careful about taking a cavalier attitude toward them.
KC's View: