Wal-Mart Aims for 'Impact' In a Tough Economy

By Jennifer Marks -- Home Textiles Today, 11/3/2008 12:00:00 AM

Bentonville, Ark. — —

Bentonville, Ark. — Wal-Mart is embarking on an ambitious U.S. store remodel program as part of its three-year strategic plan, dubbed “Project Impact.”

With the economy driving up Walmart's comp traffic from households with incomes over $65,000, the retailer believes it is in a position to grow market share and maintain it after the U.S. economy picks up, several executives said during Wal-Mart's annual analyst conference last week.

Wal-Mart Inc. ceo Lee Scott said that while the economy is challenging for consumers and business alike, “this is Wal-Mart's time. It's the same environment in which Sam Walton built this company.”

Walmart U.S. is already out-performing its chief competitor in each of six core categories, according to Eduardo Castro-Wright, president/ceo of U.S. stores. Walmart's comps in home showed a positive uptick of 0.2% in the most recent quarter vs. a 4.3% decline at its chief competitor in the department, presumably Target.

The three-year plan will focus around 10 key words:

Save Money. Live Better. A marketing message directed at consumers.

Win. Play. Show. An organizing principal for decisions about merchandising and assortments.

Fast. Friendly. Clean. A direction for the in-store experience.

All Walmart business units are dividing their assortments into “win” items that Walmart will pursue aggressively to gain share; “play/grow” items where there are opportunities to capture growth; “play/sustain” items that will balance growth and profit; and “show” items, categories Walmart must maintain as a one-stop shop.

In show categories, Walmart will rationalize skus and suppliers to drive efficiency, according to John Fleming, evp, chief merchandising officer.

That framework will also be applied to store remodels, said Fleming, which will emphasize clarity of offerings and price point leadership (many of the pricing signs depicted in the presentation were dollar figures only — $5, $12, $25). “We will distort and exaggerate the growth categories.”

Across the home department, presentations will center upon a brand-blocking presentation of “the trifecta” of three house brands: MainStays, Canopy and Better Homes, said Linda Hefner, evp, home SBU, general manager.

Canopy, launched earlier this year, and Better Homes, launched in the fall, “are doing very well,” she said. “Some categories are doing double-digit comps.” MainStays, which got an overhaul during the past year, continues to speak to Walmart's core customer, she said.

By the end of fiscal year 2009, Walmart will have remodeled 12% of its existing store base, said Bill Simon, evp/coo. By the end of fiscal year 2012 some 70% of stores will have been remodeled. The remodeling will be completed in fiscal year 2014, he noted.