What happens if Walmart is not viewed as saving people more money?

Walmart hinges its brand on price leadership, so recent impressions of the retailer have been troubling

I recently saw Steve Quinn, Walmart US’s chief marketer, present at the Centre for Retailing Excellence conference. His speech focused on Walmart’s marketing innovations, where he advised suppliers to align with Walmart’s efforts reach shoppers through mobile and social media.

While the topic of his presentation was timely and relevant, it was his introduction that was the most thought-provoking part. Quinn began by explaining that Walmart is a company with a purpose, to save people money so that they can live better, and that “without saving people money, the world doesn’t need Walmart.”

So, what happens if Walmart is not viewed as saving people more money?

Recent survey data from TNS Canada found that more shoppers of discounters like No Frills were satisfied with the “value for money” offered than Walmart shoppers were satisfied with Walmart. Costco also received higher value satisfaction scores from its shoppers than Walmart received.

I’ve reviewed similar findings from BrandZ reports in the past. These surveys all focused on groceries and consumables, key areas for Walmart, as it uses the Supercentre, with a full grocery offering, to drive its position in Canada.

Given that Walmart hinges its brand on price leadership, such impressions are troubling. The retailer’s recent performance reflects this caution.

While topline sales remain strong at roughly 5%, Walmart has repeatedly reported flat to negative comparable store sales. While Walmart relies on new Supercentres to drive growth in Canada, this underlying weakness will cause tension as it looks to shore up sales momentum; particularly given that competition is heightening through consolidation and new entrants.

The retailer will continue to look for support from suppliers. Though, before deciding on how, a serious assessment of the retailer’s position, direction, and its ability to address this underlying image concern is needed.

If you’d like to further this discussion, join us at Kantar Retail’s Canadian Forum on September 18, 2013 in Toronto, or e-mail me at: [email protected].

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