The Homa Files

TakeAway: Wal-Mart, the world’s largest retailer, has had seven consecutive quarters of declining same-store sales. 

A variety of factors contributed to this, including new shopping habits, strong competitors and a loss of some “fill-in” trips.

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Excerpted from WSJ, “U.S. Sales At Wal-Mart Show Decline” By Stephanie Clifford, February 22, 2011

As the Christmas season approached, Wal-Mart Stores said it was fixing the problems in its United States division. It hired new executives, added merchandise that it had cut, and fought with Target and other competitors to provide the lowest prices over the holidays.

Company executives and analysts said consumers seemed to have changed their ways during the recession, and that has persisted into the sluggish recovery.

New shopping habits, like using less credit, relying more on month-to-month cash and buying in smaller packages, have hampered Wal-Mart’s ability to climb out of the sales slump. 

In addition, while consumers are still using Wal-Mart for big shopping trips, they are visiting drugstores and dollar stores for in-between purchases.

In the fourth quarter of 2010, the problems stemmed from several areas. Toy sales were down in American stores, though Wal-Mart had aggressively promoted prices and added back toys to its aisles. Apparel continued to be a problem. 

And in consumables — basics like toilet paper and soap — Wal-Mart said its prices and sizes were a problem for shoppers who continued to be on tight budgets.

Edit by AMW

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This entry was posted on March 8, 2011 at 6:45 am and is filed under Retailing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.