Walmart Changing It's Ways to the Dollar Store Design and more!

Goldman Sach's and Rothchild are financial advisors of WalMart!

Walmart, America’s most profitable corporation, doesn’t seem pleased with old news! Just afew months into 2011 Walmart is changing their ways and maybe for good reason. They have a few new tricks up their sleeves to combat the steady decline in sales over the last few quarters. Walmart is going ‘Dollar Store’ style, with the announcement of the opening of their first “Express Store” opening in Gentry, Arkansas as early as May of this year according to Bloomberg Business Week , with as many as 40 Mini-Walmart‘s to follow. Maybe Walmart never thought it would have to compete for business with the lowly dollar store, it is primarily dollar stores that have lured shoppers from Walmart Super Centers since the recession hit. Dollar stores like Family Dollar and 99-cent Only Stores have become so profitable they're being offered billion dollar buyouts. These stores, along with Dollar Tree and Dollar General, have consistently out-performed many other stores, including Walmart. It's no wonder then that Walmart is making a bid to win back customers complaining of long lines and poor service and hectic parking lots, by mirroring the dollar store model. Last year, analysts predicted that dollar stores would lose their new-found customers when the economy started to recover, but those predictions didn't come to pass. In fact, dollar store profits continue to grow, as do the number of stores springing up across the country. Each of these stores are 14,400 feet in size, about a tenth of the size of a super center, which are typically 185,000 square feet. The express stores will include a pharmacy, fresh and frozen foods and general merchandise in 12 aisles. The other thing Walmart will be doing that closely resembles what Dollar Tree and 99-cent Only Stores have been doing for years, is to expand its online efforts through "Pick-Up-Today," an article in the New York Times states.

*The information above was based on an excerpt by Marlene Alexander.

*Marlene Alexander is a writer and dollar store diva. She writes

using only items from the dollar store.*

You would think Walmart would be inclined to keep their friendship with the big name Brand Marketers with the steady competition from the dollar stores who mainly carry off the wall brands but it seems Walmart may be taking that page from the dollar store book as well. Brand marketers have a growing list of complaints about Walmart. Their major complaint stems from its aggressive moves to expand its own Great Value line. Marketers also complain about Walmart decrease of promotional space since they’ve cleared their aisles of "action alley" pallet displays and stepped up category-assortment sections which put brands against one another in the view of the consumers eyes. Beyond increasing common category reviews, Walmart has institutionalized ways of pitting marketers against one another regularly. Appointments with buyers are now made so that every player in a category appears back-to-back on the same day, a move designed to put pressure on them to provide better deals.

Ironically Walmart says merchandisers have said they feel the need to press for harder concessions because their public relations efforts have succeeded in improving its former image as a bully. Walmart won points with environmentalists with its announced goal of getting suppliers to reduce greenhouse gas emissions from their supply chains and bring more locally grown produce to consumers nationwide.

Some suppliers responded with a belief that Walmart's efforts to cull assortments may be contributing to its troubles, saying the effort has knocked some local and regional brands off their shelves putting Walmart at a disadvantage to supermarket competition. “Pricing may be a factor in Walmart's slowing sales“ said Leon Nicholas, retail insight director for Kantar Retail, "but a bigger concern is assortment." “Walmart has cut assortment particularly in low-priority categories, but it seems some of those assortment cuts were driving store traffic. Nicholas also stated, "It wouldn't surprise me to see them selectively bringing those items back." Club and dollar stores in particular have used limited assortment to their advantage as leverage with suppliers for years. CVS and Walgreens are increasingly stepping up such efforts, too. The difference with Walmart, however, is it makes up 20% to 50% of sales for many brands, far more than any other retailer. So a marketer or brand has little choice when it loses its space on Walmart shelves but to promote aggressively elsewhere.

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- a recent WSL survey found 65% of consumers with incomes of under $50,000 or less had shopped at a dollar store in the past three months, 47% of households with incomes over $100,000 had done so.

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-Top executives of Target and Kroger Co. have indicated a willingness recently to sacrifice margin if necessary to avoid losing share to Walmart. And Target Chairman-CEO Gregg Steinhafel has vowed to step up advertising aimed at addressing many consumers' impression that Target's prices are still higher than Walmart's.

- Costco and Dollar General, have been posting sales growth in recent quarters against similar growth a year ago and beating Walmart on the combined two years

- "… the consumer has figured out that Walmart's prices are too high in key categories. ... The consumer is confused. When Sam Walton and Doug Degn, who formerly ran merchandising for Walmart's grocery products, ran things, the consumer understood she would save in every category every day."

- Supplier executives say that Walmart is still pressing for savings harder than ever, but less often passing the full savings on to consumers.

- Burt Flickinger, principal of consulting firm Strategic Resource Group, who's also in the midst of a nationwide pricing study of Walmart vs. competitors, finds Walmart increasingly losing out in pricing battles to conventional supermarket operators in addition to dollar stores, hard discounters, clubs and Target, particularly on key beverage items -- such as milk and soft drinks -- whose prices consumers watch most closely.

- Kantar Retail's Management Ventures 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.

- Walmart actually raised prices on average across all three segments from six months ago, while Target cut prices in health and beauty and nonedibles.

- 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!

- a recent survey by WSL Strategic Retail showed that three-quarters of dollar-store shoppers believe those stores are cheaper than Walmart.

- Walmart is increasingly finding itself caught in the middle between higher-end retailers and value players and, at least in recent quarters, is losing share to both. That has some suppliers and market watchers wondering if Bentonville's strategies -- which have included a bigger focus on margin expansion, culling assortments and promotional display space, and increasingly playing marketers off against one another in category reviews -- are flawed.

- Walmart saw the first down sales quarter in its history and a surprisingly weak top-line over the holidays as aggressively expanding dollar stores and hard discounters swiped at its positioning. 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.

- Walmart in January also sharpened its focus on nutrition, aligning itself with Michelle Obama's anti-obesity efforts and pledging to reduce sodium, sugar and fat by 2015 while developing criteria for a front-of-the-package seal to identify healthful foods. There, however, the retailer raised some questions about whether it's really going much beyond what was already being done.

- Walmart notes that its supplier-sustainability assessment, for example, isn't mandatory. Then again, it also notes: "We do intend to reward those suppliers who have measured impacts and show progress toward meeting stated reduction goals.”

- Walmart-style big boxes may be giving way to a return of smaller stores as a variety of smaller formats thrive. And while Walmart is highlighting low prices for everyone, it seems to be becoming more and more clear that it can't please everyone in every income bracket.

- In ads breaking next month (April 2011), Walmart will highlight its decades-old everyday low pricing by poking fun at the high-low strategies of competitors offering discounts on select products.

- "Walmart is retrenching to core principles that worked for them through the late 1980s and early 1990s, when the boomers here in their core family-rearing years," said Leon Nicholas, director-retail insights at Kantar Retail.

- As Walmart increasingly returns to strategies that made it Earth's biggest retailer -- everyday low prices, broad selections, cluttered aisles and shelves piled high with discount merchandise -- some critics and early data suggest that what once worked may not anymore.

- Big stock-up trips generally appear to have declined, he said, and some younger households are shifting those trips online, where Walmart is a relatively small player compared with Amazon and Drugstore.com.

- for all the advantages of being the biggest retailer, even Walmart faces some challenges, particularly on what may be its most ambitious effort-a Sustainable Product Index that distills the complexities of determining which products and companies are the greenest into comprehensible ratings for consumers. The retailer at the outset turned development of the Sustainable Product Index over to the Sustainability Consortium, led by academics at Arizona State University and the University of Arkansas and now with 65 members in total.

- "Maybe the supercenter itself as a format has run its course in terms of providing growth.”

- While manufacturers might have expended hundreds of millions of dollars in lobbying or campaign contributions to fight similar efforts by governments, they haven't been complaining publicly at all about such mandates from earth's biggest retailer.

Andrea Thomas, senior VP-sustainability for Walmart, the flagship U.S. retailer of the Walmart Stores, which also includes Sam's Clubs and numerous chains overseas, said it's really consumers setting the agenda, not the retailer. "Our customer is becoming much more articulate about needs in this space," she said. "The best way to do it is to work together as an industry." Walmart, however, clearly has been out in front of the rest of the industry on many issues. And unlike a government, it isn't bound by constitutional due process that bogs regulations sometimes for years. No Tea Party representatives are trying to withhold funds for its greenhouse-gas reduction plans. And with billions of dollars at business at stake for its biggest customers, Walmart wields a bigger stick than any fines a government can impose.

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