“Today’s Walmart is very different from the Walmart of several years ago,” Rainey said,
He that it has been making changes that “appeal to a much broader demographic than what we have historically.”
Walmart has been attracting a wider range of shoppers including people with more money.
One of the major changes it has brought in is offering higher-end items, like Apple products or Bose headphones.
Rainey told Fox Business that these items are “sought after by more affluent customers” and a big part of the updated strategy.
In the latest fiscal quarter, households earning more than $100,000 accounted for 75% of its share gains.
Also a few years ago WalMart beef up its online marketplace taking on Amazon.
And 10 years ago pay for employees was in $8-9/hour range. Today it pays its employees $14-18/hour.
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More Welchian “high-grading”. Appeal to higher income people, because they have more money to take, and leave the lower income people behind. The auto industry has been doing this for several years, first by discontinuing their lower priced models, then raising the price of what is left. Example, the lowest price Jeep is now the Compass. The base trim starts at $25.900, but no dealer has any. In a 25 mile radius from casa del Steve, there is only one example of the next trim up. What almost all dealers stock, exclusively, are the higher trims, starting at $32,490. We all know how it goes “can’t make the payment on 36 month financing? no problem. finance it for 72 months”
So now Walmart is doing the same thing. “Grow” profits by taking more off of each of a shrinking number of customers.
Steve
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My guess is we will see wealthier plumber’s butts.
Sorry, I will show myself out.
MS
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Looking forward to one-stop shopping at Buy n Large in the near future.
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Yes, what demographic does Amazon serve?
Walmart wants to address that one too. And with numerous local stores can probably beat them on home delivery time. And often on pricing. And no comparison with order on line and pickup at store avoiding the problem of package theft.
Lots more Walmart stores than Whole Foods stores.
Amazon apparently is not really interested in selling food. Their Fresh stores are on hold, based on what we see here. There are at least six stores (built or partially built) here. They have been mothballed or indefinitely postponed or abandoned. Nothing happening for over a year or two.
Amazon’s thrust into retail food seems to have some problems. Purchase of Whole Foods was a step in that direction. But required demographics make it difficult to expand the chain. Probably worked well in area around stores.
Food retail in other areas seems not profitable enough in spite of several initiatives.
For now strategy seems to be rapid delivery from closer warehouses. Food pickup at Walmart seems to be booming. They are strong competitors to Amazon (and local grocery stores).
Now that Kroger-Albertsons has fallen through would Amazon buy Albertsons? Unions would be a problem. But much stronger local presence might fit.
IMO, no. Amazon would do better to look at buying 1-3 (or more) food wholesalers, not retailers. Those are the types of volume operations Amazon is used to seeing. Having a nationwide presence is best (IMO) rather than serving a hodge-podge of scattered areas with lots of holes (as Fresh is now) in terms of both products available AND territories served.
No, Albertson’s is largely regional with the biggest presence in the Mountain and West coasts. That doesn’t give Amazon the spread they need for their business model - unless they could buy another chain that complements like, um, Kroger. But given what just happened, that seems unlikely.
I agree that they will likely continue the spread of distribution centers to provide next day service. While WalMart has many times the number of stores, they can only carry so much for delivery, amounting to a few hundred thousand items; Amazon can carry multiples of that, and I suspect the 80/20 rule isn’t so valid with a long-tail business like Amazon as it is with brick-and-mortar retail. So WalMart can offer “same day” (at a fat price) but on a slim product line (groceries probably sufficient but hard goods not so much), while Amazon will excel in “everything else.”
I can’t imagine the plan was to spread Whole Foods stores as widely as WalMart grocery or other chains; the client base is entirely different, and most people can’t exist on just what they can buy at WF. I think it was a distribution destination play (lockers) and a toe in the door to food but I don’t think it has worked out very well for them. Maybe not bad enough to jettison, but not good enough to crow about either.
Here in Portugal people place orders on line with supermarkets and delivery services like Uber Eats delivers the stuff - mostly motorcycles and a few on bicycles.
The Captain
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Walmart bought Jet a few years ago and now can supply almost anything sold by Amazon. It can be delivered to your store for pick-up or delivered to your home. They also have a plus program that gives you free shipping similar to Amazon Prime. But usually you can find what you want with free shipping.
Found some deals on Jet, but after it was absorbed by Walmart, those “went away”.
Yes, but not “within hours.” (Jet ended “same day delivery”) when they were absorbed by WalMart. That puts them at parity with Amazon, not ahead, and I would argue that Amazon’s entrenched (and paid) membership means that a majority or those orders end up in an Amazon truck, not a WalMart truck.
When Amazon+ membership approaches Amazon Prime membership, then it will be something.
They are competitors. Not saying who is better. I’m not a prime member. I usually start at Walmart for free shipping.
82% of US households are Prime members. That’s a dominant position if there ever was one.
Both Amazon and WalMart offer free shipping for orders over $35. You have to join either WalMart+ or Prime to get free shipping on everything. But joining WalMart+ is about $40 cheaper than Prime, but also comes with fewer benefits (Prime TV streaming, gaming, (some) free digital books, music, discounts at Whole Foods, and so on.) It may be that none of those things are important to you, that’s what makes it a competition.
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