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Posts Tagged ‘Walmart’

Walmart’s Green Initiatives

May 31st, 2011 Comments off

Like arch-rival Target, Walmart is seeing investment in environmentally friendly practices flow to the bottom line.  It has long been my position that companies will embrace “green” when it results in “green” to their income.  That seems to be the case here as well.  Through some tweaking, Walmart has turned expenses into revenues:

A seemingly unrealistic goal of zero waste to landfills is suddenly looking attainable; the company cut its waste 81% in California, a pilot program now going nationwide. The trick to it was finding new uses for former trash: turning plastic waste into dog beds, food waste into compost sold in its stores, expired but still healthful foods into food bank donations. The waste Wal-Mart once paid to have hauled away is now earning the company more than $100 million a year.

Read more at: http://www.latimes.com/news/opinion/commentary/la-oe-humes-walmart-20110531,0,5608647.story

Wal-Mart sharpens low-price focus

April 11th, 2011 Comments off

Here is a piece that looks at Walmart’s efforts to move back the clock to a time when they were more closely aligned with Sam Walton’s vision.

Powerful snow blowers seem like a key item to keep in stock in Minneapolis, where residents need to uncover their driveways and sidewalks from about 50 inches of snow each winter.

But a couple of years ago, Wal-Mart decided to take some snow blowers, ice-fishing gear and other goods out of its Minneapolis-area stores.

Eliminating that merchandise was part of an effort the world’s largest retailer kicked off in late 2008 to get rid of items nationwide that were not top sellers and promote deep discounts on other more popular goods.

 

Wal-Mart sharpens low-price focus | Reuters.

Walmart and Responsibility to Society

February 3rd, 2011 2 comments

Walmart recently announced an initiative to make the food it sells healthier.  As the nation’s largest grocer, this will likely have an impact on food sold elsehwere as well since manufactures of goods aren’t going to make a “Walmart version” and a “non-Walmart version” of their products.  I guess a few might, but as in so many other situations “as Walmart goes so goes the market.”

Some questions I’m pondering:

  1. Does a retailer like Walmart have a duty to society to undertake initiatives such as this?
  2. If you answer “yes” to the first question, does it matter if the retailer is a market leader?  In other words, does Aldi or the corner grocer have he same level of responsbility?
  3. What are the other motivations for Walmart in undertaking this push for healthier food?

Most of the people I’ve talked with insist that a company’s sole responsibility is to its shareholders.  In that line of thinking, Walmart would only make this move if they were projecting that doing so would result in increased profits (and if their customers were demanding it — which it seems they aren’t).

Article links about the announcment:

In contrast with the prevailing though (in class and elsewhere) there is a group of folks that insist that Walmart DOES have a duty as the nations largest grocer to positively impact the health of the public.  Before recently, no single grocer had enough market-share to even contemplate such a thing but now that is not the case.  In spite of the fact that Walmart’s customers are perfectly willing to purchase unhealthy food (because they do it every day) Walmart is making a bold move by reformulating its offerings to be healthier.

Skeptics point out that Walmart may very well be doing this to save money it spends on employee healthcare since a good number of those folks likely buy their groceries at Walmart, but I wonder if this is really a cost/benefit type decision of if it represents something more — a social consciousness of a company’s place in society.  Interesting, to say the least…

Article links analyzing the announcement and the role of businesses in society when it comes to corporate responsibility:

Supervalu in Pricing Vise

October 20th, 2010 Comments off

Today’s Wall Street Journal had a piece on a local giant, Supervalu, and the tricky balancing act they need to pull off to successfully set prices amid cost increases, strong price competetion, and a stagnant economy.  Given that we are talking about pricing in class right now this is especially timely and grocers are among the most price competitive businesses operating on razor-thin margins with many cost leaders vying for business.  In a way, food has become a commodity and people are looking for the lowest price in many (most?) cases.  We can argue whether or not food being commoditzed is in the best interest of our population and country, but it is the reality that Supervalu (amongst others inclusing Walmart) find themselves operating.  The pressure is intense to remain profitable while juggling the costs and prices…

Earnings: Supervalu in Pricing Vise. Timothy W. Martin, Paul Ziobro. Wall Street Journal. (Eastern edition). New York, N.Y.: Oct 20, 2010. pg. B.4

Target to open smaller stores

September 24th, 2010 Comments off

In plans similar to the ones I posted last week about Walmart opening smaller stores, Minnesota’s own Target is planning to do the same.  Although the Walmart speculation made it sounds like some of their future locations might not be larger than a typical convenience store, the Target plans appear to be suited more to urban locations with the one that is planned being slated for downtown Seattle.

“We’ve never been a cookie-cutter retailer, but we are increasingly realizing that one size doesn’t fit all,” said John Griffith, executive vice president of property management at Target.

Read more at this link: http://www.google.com/hostednews/ap/article/ALeqM5gtShdCaRNm9Yybvnb_cZLvZ_TC8QD9IEIPDO0

or at this link: http://www.startribune.com/local/103711349.html

Walmart Bringing Smaller Store Format to America?

September 20th, 2010 Comments off

I posted a few months ago about Walmart’s smaller store footprint in the U.K. Today’s Financial Times reports on its front page that Walmart is lining up real estate across the US to roll out smaller format stores in its home country.  The article cites chatter amongst real-estate brokers as the source of this information and the world’s largest retailer has yet to announce detailed plans, but suffice it to say that anything Walmart does has the potential to shake things up.

“They’ve been looking at sites between 20,000 and 50,000 sq ft over the summer,” said one broker in northern California.

Garrick Brown, a vice-president of research at Colliers International, said the retailer was looking at taking over existing buildings, and that “chatter” from brokers suggested the retailer was looking for scores of sites across the US. “It is going to be huge,” he said.

Walmart lines up sites across US to roll out smaller format stores. Jonathan Birchall. Financial Times. London (UK): Sep 20, 2010. pg. 1

Walmart lines up sites for smaller stores. Jonathan Birchall. Financial Times. London (UK): Sep 20, 2010. pg. 15

[EDIT TO ADD LINK TO AP STORY]

The AP has the story now too at this link: http://apne.ws/b8nNUz or via StarTribune.com at this link: http://www.startribune.com/business/103300079.html

Strategic Positioning at Wal-Mart

September 4th, 2010 Comments off

I’ve had the link to this article in my Inbox for over a month now, but the timing couldn’t be better for posting it now in terms of what we are discussing in class.  I even mentioned Wal-Mart and failed fashion strategy recently in class, probably because my memory had been triggered by seeing this recent article.

Over the past decade, Wal-Mart has veered from one approach to clothing to another. The discount giant has even tried to emulate rival Target Corp. by stocking its own lines of trendy outfits. At other times the Bentonville, Ark., retailer has placed its bets on bulk packs of everyday wear, like tube socks and T-shirts.

“Wal-Mart has suffered from not knowing who they want to be,” said Allen Questrom, the former chief executive of J.C. Penney Co. who recently left Wal-Mart’s board. “They’re either trying to be too fashionable or too basic.”

As mentioned above, not following a consistent path can be dangerous when it comes to being competitive.  The article goes on to say that Wal-Mart has to stick with a plan, but that plan should be differentiated to avoid the danger of being seen as a pure cost leader when it comes to fashion.

But sticking to just the most humdrum clothing is a risk for Wal-Mart, too, as it carries lower margins than more fashionable apparel and isn’t as much of a traffic driver or an impulse buy. That is something Wal-Mart could use, as its sales at stores open more than a year have fallen for the last four quarters.

“They need to be dominant in basics like jeans,” said Mr. Questrom, “but they have to be fashionable jeans.”

A Fashion Identity Crisis at Wal-Mart — Newly Installed Apparel Chief Needs to Strike Balance Between Boring Basics and ‘Chasing Glitter’. Ann Zimmerman. Wall Street Journal. (Eastern edition). New York, N.Y.: Jul 29, 2010. pg. B.1

Wal-Mart U.K. Deal Fits Goal: Go Small

June 4th, 2010 Comments off

The last in a trio of articles from page B1 of the May 28th Wall Street Journal (or at least it was in my edition of the paper) is about Wal-Mart’s strategy in the U.K. to operate stores with smaller footprints than what most people envision when they think of the giant retailer.

Asda, the British arm of Wal-Mart Stores Inc., is buying the U.K. stores of the Danish Netto chain in a £778 million ($1.12 billion) transaction, filling a strategic gap for Wal-Mart in Britain — smaller stores that can compete with rivals that have opened downsized local markets in recent years.

We are seeing similar strategies play out in North America as “big box” retailers run out of room to expand in their traditional formats.  With the demise of big players like Linens ‘N’ Things and Circuit City, in fact, there are relatively cheap spaces that are vacant as retailers try to manage costs in the face of online competitors, among others.  Will Wal-Mart in the United States seek to do something similar?

Corporate News: Wal-Mart’s Asda Acquires Netto Stores in U.K.. Cecilie Rohwedder. Wall Street Journal. (Eastern edition). New York, N.Y.: May 28, 2010. pg. B.7

Wal-Mart works with suppliers to shore up financing

November 15th, 2009 Comments off

walmartSimilar to what Sara Lee did a few months ago, Wal-Mart is working closely with suppliers to make sure that they have ample financing.  Recognizing that if a supplier (or several) were to fail their own costs would rise, Wal-Mart is working closely with their value chain partners to make sure that doesn’t happen, especially in light of the recent bankrupty of CIT Group, a major supplier of financing to small/medium businesses.  You might even look at this as Wal-Mart creating a new value chain connecting its suppliers of merchandise with its suppliers of cash (Wells Fargo and Citibank).

Wal-Mart helps apparel suppliers secure financing. Nicole Maestri and Lisa Baertlein. Reuters. Fri Nov 13, 2009 4:35pm EST

Are Amazon, Wal-Mart, and Target engaging in Predatory Pricing?

October 23rd, 2009 Comments off

Some independent booksellers have asked the Justice Department to investigate the recent price-war where certain hardcover bestsellers are being offered for sale by Amazon, Wal-Mart, and Target for $9 or less.  This makes it impossible for independent booksellers to compete according to their trade organization.  The WSJ Law Blog is pessimistic about the possibility of this going very far, but it does make for a current, real-world example of what we have discussed in Chapter 12 with regard to the legal aspects of pricing.

Are Amazon, Wal-Mart, and Target Pricing Like Predators?