Walmart Looks To Draw Customers In During A Challenging Holiday Season
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
Walmart hopes aggressive holiday sales will soften the blow of declining consumer confidence
For its third quarter, Walmart reported that net sales were up 1.6 percent to $114.9 billion, while revenue increased $1.9 billion, or 1.7 percent over last year, reaching $115.7 billion. However, regardless of these increases, the company’s CEO Bill Simon expects the holiday shopping period “is going to be about as competitive of a market as we’ve ever seen. Incomes are going down, while food costs, gas and energy prices — while abating — are still eating up a big piece of customer budgets.”
Indeed, comparable store sales (excluding fuel) fell 0.3 percent, revealing that the company’s customer base is still struggling. The government shutdown in October, along with uncertainty about healthcare reform, a 2 percent payroll tax cut, and a $5 billion cut in food stamps have all been negative influences on Walmart’s lower-income customers’ spending habits. These pressures will more than likely follow through the holiday season, and it seems Walmart knows it — for the fourth quarter ending January 31, 2014, Walmart is predicting comp store sales will be relatively flat, compared to a 0.3 percent increase in Q4’12.
While Mike Duke, Walmart Stores president, reports that the company saw solid earnings growth and strong operating income across segments, he says, “Our most important priority is growing top line sales, including comp sales. The retail environment, both in stores and online, remains competitive.” He cites in particular, Walmart’s aggressive holiday initiatives that the company hopes will help increase traffic levels and give customers many affordable gift options during a financially difficult holiday season.
So far, some of the programs seem to be working in the company’s favor. Walmart reports that its layaway program unveiled in September has already recorded 2 million transactions. Similarly, the company recently announced a line of Internet-only promotions to improve e-commerce sales and draw more attention to Walmart.com earlier in the holiday season. This quarter, e-commerce sales did positively impact comp sales by 0.2 percent. However, increasing traffic to brick and mortar stores does remain a priority for the retailer, especially following third quarter comp store sales results. To draw customers into stores, the company is offering its BOPS program, which could help encourage more in-store sales when customers come in to pick up their delivered goods. In a competitive environment, it’s proving important for all retailers — even ones as giant as Walmart — to do all they can to make themselves available to customers this holiday season.
Are you a retailer that wants to publish your opinion?
Contact us to become part of our Editorial Community.