ROGERS, Ark. — Wal-Mart executives, reiterating the importance of adjusting to a volatile retail environment, said Tuesday that the company is striving to provide consumer value through selection, service and style, not simply low price.
The positioning appeared to be a response to rival Target Stores Inc., which in the last two years has achieved greater same-store sales, margin and stock price gains by positioning itself as a convenient, attractive and trendy place to shop.
"No, we are not going upscale. We are going to be focused not just on the lowest price, but on the best price," vice chairman John Menzer said as he opened the giant retailer's second annual media conference here. "Our customers are moving from a focus on price to a focus on value, and we are moving with our customers."
Although Wal-Mart last month opened a Supercenter in Plano, Tex., that sells $557 bottles of burgundy and other luxury items, company executives emphasized that Wal-Mart is not abandoning its "loyalist customer," who shops there 63 times a year and spends 77 percent of the household grocery budget at the store. Only 3 percent of merchandise of the upscale unit is different from that of a typical Supercenter, they said.
John Fleming, chief marketing officer, said Wal-Mart attracts 138 million customers each week globally and does not need to reach upmarket to gain new shoppers. "It's about understanding the customers who are already in our store," he said.
The company is courting a "selective" shopper — a time-starved, career-driven mother who is looking for values and solutions, not necessarily the lowest prices. She is the customer targeted by Metro 7, Wal-Mart's newest fashion line, which was launched in October and will expand to 1,500 stores for September.
Claire Watts, executive vice president of merchandising and apparel, explained the new merchandise focus as "creating access to what would typically be called luxury items." She cited 400-thread-count Egyptian cotton sheets from Springmaid, selling for about $50, as an example. To address a time-challenged customer, the retailer has experimented with decor displays that group various objects — pillows, artificial plants, candle holders — around design and seasonal themes rather than keeping each item in a separate department. It is a strategy Target has employed successfully for years.The Wal-Mart conference, which attracted 70 media outlets, was tightly scripted and left little time for company officials to face questions.
Wake-Up Wal-Mart, an opposition group, used the occasion to hold a news conference during which four current workers called on the retailer to put an end to cost-cutting programs. Eduardo Castro-Wright, chief executive officer of Wal-Mart Stores USA, has been pushing to reduce U.S. store operating costs through automated scheduling that puts fewer workers on during off-peak shopping hours and reduces the number of full-time employees. The workers complained this was disruptive of family life as the number of hours, and the schedules they work, fluctuate constantly.
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