Wal-Mart signals a return to low price legacy

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MONEY-SAVING MOMENT: The world’s largest retailer is signaling a return to its low price legacy after losing customers to competitors both up market and down market.

Wal-Mart has not had the easiest time over the last few years. When we went into the Great Recession 4 years ago, they were at first a mighty beneficiary, with customers flocking to them and same store sales numbers going up as a result.

One segment of those customers came to Wal-Mart from rival Target. But as people got more confidence in their own financial situation as we’ve emerged from the recession, many of them are abandoning Wal-Mart and returning to Target.

At the same time, so many retailers failed in 2007 and 2008 (and 2009) that retail vacancies went up. That created a sweet spot for dollar stores like Dollar General, Dollar Tree and Family Dollar and gave them a leg up for enormous growth. Now customers are leaving Wal-Mart because the mega-retailer is being undercut by the dollar stores.

So Wal-Mart is getting it from both sides. Their response? As a headline in The New York Post blared: “Walmart wages new dollar battle.”

Wal-Mart is pressing suppliers for the cheapest items in a number of categories, including cosmetics, party favors, appliances and greeting cards to compete with the dollar stores. They’re looking for more opportunity to sell to you and they will use price to do it. So if you are price-sensitive, you should see Wal-Mart’s new cheaper prices by the late spring or early summer.



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