business news in context, analysis with attitude

Walmart US CEO Bill Simon said yesterday that Walmart is testing in three markets a plan that will use its large stores as distribution centers for its smaller stores, a program that it hopes will both cut costs and improve in-stock positions.

That means, MarketWatch reports, that "after 50-foot trailers arrive at the supercenters from distribution centers, goods on pallets marked for smaller stores then get loaded to smaller trucks to deliver to those smaller stores, lowering costs. As Walmart expands fulfilling online orders from supercenters, they also will be able to send daily shipment to the smaller stores for shoppers to pick up things they order online that aren’t carried there."

MarketWatch also notes that "the company plans to open 300 plus supercenters in the next three years, but it’s adding more than 400 Neighborhood Market locations, similar to a supermarket, to be a 700-plus store chain with $12 billion in sales by fiscal 2017. The 20-unit Express chain will allow Walmart to compete effectively with dollar stores."

In other Walmart news:

• Simon says that the US government shutdown is affecting business. "We’re operating in a very uncertain environment. We build a little momentum and then we see 800,000 people furloughed, which isn’t helpful, because if people aren’t getting paid they aren’t shopping."

MarketWatch reports that Walmart, "which had made its name on offering everyday low prices instead of temporary discounts,  said it is planning to drum up sales by offering a series of October 'special buys' where it offers discounts on items on individual weekends."

Reuters reports that "Wal-Mart is not waiting for the holiday season to get aggressive on pricing. Walmart U.S., its largest business by far, is promoting low prices on everything from Kraft's Velveeta cheese and PepsiCo Inc's Doritos chips to Procter & Gamble Co's Pampers diapers and Bounty paper towels this month, while Sam's Club will have another discount booklet for members starting on October 30, as both chains try to boost sales early in the fourth quarter.

"More than 1 million people have already signed up for holiday layaway, which allows Walmart U.S. shoppers to put items on hold and pay for them over time. Four of the top five items on layaway are devices including Google Inc Nexus tablets, HP's HP 2000 laptop, the Hisense Sero 7 tablet and Fuhu Inc's nabi 2 Kids' tablets."
KC's View:
There's a lot to be said for Walmart being willing to adjust its strategies and tactics as a way of compensating for societal and competitive changes, and for the fact that companies have learned how to compete more effectively with Walmart.

I don't think the Bentonville Behemoth has any choice.

But some will suggest that Walmart is getting away from the things that make it unique, and are its differential advantages.

We'll see.