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November 30, 2004
Wal-mart to cut prices?
I found this headline in the NYT's: Wal-mart to Cut Prices After Poor Sales. I was perplexed, as Wal-mart is the every day low price competitor in the market. Shouldn't its prices already be as low as they can? Is Wal-mart going to lose money to retain sales volume? Will they squeeze their vendors even more, so they make less money so Wal-mart can make more?
Wal-mart's customers if give the choice, would shop elsewhere. I have heard this comment time and time again when watching or reading stories or research on Wal-mart. I think this is for many reasons. First, in smaller communities, Wal-mart drives out competition. Even if low prices are great, variety suffers. Second, Wal-mart stores are not pleasant. They are large, unorganized, product is not presented in an appealing manner, and the employees are often not available for assistance. Third, Wal-mart does not always carry the best product or the latest product.
The high-end retailers did very well this past "Black Friday". I think this shows that people generally aspire to acquire nice things. While many of these retailers used deep discounts for early bird shoppers, they also know that most customers will pick more expensive/profitable items while in the store. I think Wal-mart should think about its strategy and maybe look at providing a better shopping experience. Then maybe people will not go to Wal-mart out of neccessity.
Posted by kermisch at November 30, 2004 12:10 PM