Tuesday, August 22, 2006

Whither Wal*Mart?

Recently the business pages noted that Wal*Mart's profits didn't increase, or increased at a slower rate, for the first time in 10 years.

Of course the press obediantly reported the Wal*Mart party line: The higher cost of gas led to a shifting of consumer spending. That was the main thrust of the news reports. I haven't seen any comparisions as to how other retailers are doing. The only other "excuse," outside of the high cost of gasoline, is the pull-out by Wal*Mart from the German and Korean markets.

Kohl's department stores, meanwhile, reported an increase in sales and profits. So while gas prices went up, a store known more for mid-level pricing outperforms a store known for "every day low prices." What gives?

Let's add some anecdotal incredients to the stew, shall we?

In mid-July I was in Appleton, WI, staying with my parents so my son could go to Vacation Bible School at grandma and grandpa's church. Mom was leafing through the flyers when an item caught her eye. She saw an ad for 70-count notebooks. Wal*Mart advertized them at $0.40 (40 cents) each. ShopKo (based in Green Bay, WI) had them 10 for $1 (or 10 cents each). Where do you think mom stocked up on notebooks?

Last week we bought Matthew's school supplies. We went to Wal*Mart because they are the lowest in cost, right? And since my wife looks at the flyers (some call them "circulars") I assumed she did her due diligence price comparisions. We bought the items at Wal*Mart.

Later in the day we were at a Target store. Walking past the school supplies I looked at the prices--most considerably lower than what we paid at Wal*Mart!

So is it possible that Wal*Mart, riding its cachet of low prices, is being undersold? It's quite possible that other retailers are starting to beat Wal*Mart at its own game!

I'm not here to dump on Wal*Mart. After the fire that left me without a home March 1st. I needed to replace lost items. Did you know you can buy new clothes on clearance at a lower price than buying used clothes at a resale shop or thrift store?

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