RETAILWIRE DISCUSSION TOPIC
Economic Downturn? Wal-Mart to the Rescue– 1/30/08
While much of the retail industry is hoping that Congress will pass a stimulus package that will get consumers shopping again, Wal-Mart is looking to jumpstart spending with a price rollback of 10 to 30 percent on thousands of items in its stores and on its website.
Discussion questions: How effective will Wal-Mart’s latest rollback public relations effort be in driving traffic to its stores and grabbing market share in the short and longer term? What will be the response from Wal-Mart’s competitors? Can they handle a prolonged price war with Wal-Mart?
During market downturns, companies with strong cash reserves invest heavily in building market share. This is what Wal-Mart is doing, and capitalizing on its leadership as a “low price leader.” The move is smart, timely, and most importantly it is congruent with their vision and mission. Weaker competitors will suffer more than stronger ones, but Wal-Mart’s move will certainly challenge all purveyors of consumer staples – as they always have.
Mike Osorio, your Dare to be Contagious! ™ strategist
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