Wednesday, September 14, 2011

Wal-Mart cashes in on income gap - The Globe and Mail

Wal-Mart cashes in on income gap - The Globe and Mail:

After the 20th of each month, when government cheques go out, Wal-Mart gets a pop in sales. It gets a surge in business at the beginning of the month, when many people are paid, and softening sales at the end of the month when they run out of money.

At the same time, the retailer enjoys a sales boost in pricier items from more affluent consumers who are returning to the discount chain after having shopped there during the recession.
To respond to these trends, chief executive officer David Cheesewright is dipping into a recessionary-like tool kit that includes weekly price comparisons with competitors; stocking smaller, more affordable packages of diapers and other essentials; $1 greeting cards at outlets next to a dollar store; and beefing up lower-cost private labels. But he’s also testing a new own-brand high-end food line called Our Finest; planning for a smaller city store, dubbed Urban 90, to broaden its customer base; and stocking higher end brands such as Bauer hockey equipment.
Mr. Cheesewright’s race over the past several years to add more Super centres with full supermarkets is paying off, more so in market-share gains than in same-store sales increases, he said. Since 2005, Wal-Mart drove 77.3 per cent of the growth in food, health and beauty and other consumer product sales in Canada, according to market researcher Nielsen. That business makes up more than 40 per cent of Wal-Mart’s total estimated $20-billion of annual revenue.

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