business news in context, analysis with attitude

Responding to some of our Walmart-related stories, MNB reader Herb Sorensen wrote:

I'm sure this observation isn't "new" to you, but size is often a disadvantage at retail, and Walmart has it in spades.  Moving an organization of that size is an incredible challenge, and THIS is the single greatest challenge to Walmart today.  Thinking moves the world, and thinking simply involves massive inertia.

It reminds again of Disraeli's lament on becoming prime minister, "I have climbed to the top of the greasy pole!"  But the inertia moderates the greasy pole analogy, as usually the descent is painful, slow and ugly.  The inertia gives Walmart some time to get it right.

True. or more time to get it wrong. (See the Washington Post story, above.)

Regarding the story we had suggesting that Jeff Bezos might decide to simply give every Washington Post subscriber a Kindle and then get rid of the paper version ... which would save money and allow for him to sell other Kindle-related content ... one MNB user wrote:

The "regular" price for the Washington Post is about $275 a year.  [The offer much lower rates to "new" subscribers.]

If they gave away Kindle with a 2 year subscription at regular price that would be a no brainer for the Post, and might be favorably viewed by the public as the Kindle would be used for a lot more than just that newspaper.

On the subject of Walmart competing with Florida grocers using BOGOs, MNB reader Tim Pramas wrote:

I am writing in regards to your reference to Walmart matching competitors’ BOGO offers in Florida which requires the customer to request the match while checking out at Walmart.  This presents a good opportunity for competitors to try to lure shoppers who now buy groceries at Walmart.  To take advantage of Walmart’s match, the shopper needs to pay attention to advertisements from other grocery stores.  If the competitor’s advertisement can offer something that attracts the shopper in addition to the low advertised price (and ideally distinguishes itself positively from Walmart), then perhaps the competitor can attract new business.

From another reader:

A few points:

1. This is a game changer because BOGO's are the only way to compete with Wal-Mart on price.

2. Is Walmart matching the price or the BOGO? You assume it's the price. Even if it is the price that is standard with their matching policy for competitive pricing so your point is not strong on that one.

3. I find it hard to believe the checkout people at Walmart would know what was on BOGO at Publix. I wonder if you could go up with any item and say it was on BOGO at Publix?

4. Unlike many retailers, Publix allows shoppers to buy only one product in a BOGO and get that item for half price. Is Walmart doing likewise?

I don't know how many customers ask for a match but this could be a nightmare for Walmart.

And from another:

Sure, Walmart price-matches other retailers sale prices; trying to find the matched item on the shelf at Walmart is often another story in stores I have checked.

Walmart had a PA grocers ad with prices Xed out with a Magic Marker.  A spot check of those items on Walmart shelves found the matched prices, but mostly gaping holes on the shelves.  I'm not sure if that was Walmart's poor shelf management or was caused by shoppers cleaning up on a good buy.

The local grocer had to stock enough of its ad items to satisfy her customers.  Walmart is not under any such constraints.  Walmart's out-of-stock problems due to centralized inventory control are legend, which may also have contributed to the empty shelves.

I've not yet seen how Walmart would handle a BOGO offer.  My guess is that it wouldn't be advertised; only offered to assuage a customer who complained.

Again, good luck finding price-matching BOGO items on Walmart shelves.  It's a great business model; Walmart gets the credit for matching prices, but it costs only the limited inventory on their shelves.

Maybe I'm wrong, but I wouldn't think that Walmart would get much credit if it matches prices but doesn't have product. It'd be sort-lived, and ultimately would irritate the shopper.
KC's View: