Wednesday, June 22, 2005

"Higher Standards, Lower Prices" Wal-Mart?

After getting whallupped by Target for the last several months, it seems that Wal-Mart has learned something about shoppers.

People want cheap merchandise but they don't want to feel cheap.

KMart had so much trouble with this concept that they went bankrupt. Wal-Mart's sales have been down lately, but they have years to go before bankruptcy might be an issue.

Here are the numbers: Target's same store sales (a key industry indicator, measuring sales at stores open at least a year) increased 5.1%, lead by strong women's clothing sales. Wal-Mart's were just 2.5%, below company forcasts for the second consecutive month.

Currently, Wal-Mart attracts more low-income customers than Target, with nearly a third of Wal-Mart shoppers earning less than $25,000 a year. The world's biggest retailer is now trying to accelerate growth by appealing to a broader, and well-heeled, group of shoppers.

In a bid to appeal to high-income shoppers, Wal-Mart's upping the fashion and quality quotient on apparel, home goods and other items. The goal is to let customers know Wal-Mart is a destination for trendy and fashionable items at a good value, said spokeswoman Karen Burk.

Part of me hopes Wal-Mart is successful (the part of me that owns their stock!), but the "upscale discount" market is more crowded and more demanding than "low price at any cost". In addition to Target, Meijer has done quite well lately with the slogan: "Higher Standards, Lower Prices" (and a clever supporting advertisement for their produce selection).

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