FINANCE

Dish Network’s bid for Blockbuster gets OK

BY CSA STAFF

New York City — Blockbuster says a bankruptcy judge has approved Dish Network’s $228 million offer for the chain, paving the way for a combination of the two companies.

Dish won an auction for Blockbuster’s assets earlier this week. Judge Burton R. Lifland of the U.S. Bankruptcy Court of the Southern District of New York approved the bid on Thursday.

According to Dish, the deal is expected to close in the second quarter.

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Why home delivery could work for Walmart

BY CSA STAFF

Walmart may be the nation’s largest grocer, but it’s not because of the compelling presentation of fresh produce or appetizing meats. The stuff is cheap, sure, but the quality isn’t always there, and even when it is, the manner in which products are packaged and merchandised detracts from quality perception. Then there are the issues that arise with so many shoppers, not to mention their unattended kids, pawing through displays of tomatoes, bell peppers and grapes. Items get bruised, or roll on the floor and get run over by carts. In short order the most meticulous presentation of produce is destroyed and Walmart’s labor model doesn’t allow for the constant vigilance that is required to maintain the type of presentation standards needed to project a quality image.

Meat is another issue. Case-ready meat may be safer due to its centralized processing and offer supply chain advantages such as longer shelf life, but it is absolutely the most unappealing way to present the product. Who wants to buy a package of New York strips sitting in a pool of blood in a black plastic tub that has been enhanced with a solution? The steaks don’t look good, and discriminating shoppers who read the fine print on labels prefer to do their own enhancing.

None of the above changes the fact that Walmart sells a lot of meat and produce.

It just doesn’t sell as much as it could to shoppers who are already in its stores and choosing to go elsewhere for produce and meat even as they load up on frozen, refrigerated and dry groceries. Then there are other shopper segments that Walmart is missing including those who don’t have convenient access to one of its 2,907 supercenters or who avoid the place because of the product, presentation and overall experience.

It is this latter segment where Walmart has the potential to win with home delivery of groceries, as it would be able to eliminate the variable of store experience from the decision-making process of where to buy food. The type of shopper most inclined to use a home-delivery service is a busy professional with kids who tends to have an above average income yet still wants to save money. In other words, exactly the type of shopper Walmart was going after with Project Impact when it sought to upgrade the store experience.

If Walmart can provide high quality fresh food at low prices and customers can avoid going to one of its stores, well that is likely to be an appealing value proposition for a meaningful number of shoppers. And if any company is going to be able to make the economics of home delivery work it should be Walmart. The company has a supply chain advantage, and its Asda division in the United Kingdom is already successfully providing the service.

Last year, the grocery category accounted for 54% of the U.S. stores division’s sales of $260 billion. The true performance of fresh categories are blurred by the fact that Walmart defines grocery broadly to include meat, produce, deli, bakery, dairy, frozen foods, alcoholic and nonalcoholic beverages, floral, dry grocery, health and beauty, baby products, household chemicals, paper goods and pet supplies.

The number could be a lot higher, but Walmart will need to figure out a way to profitably deliver meat and produce to existing shoppers who aren’t presently buying those categories in stores in addition to new customers who would like to have those products brought to their home.

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NASCAR events to generate traffic at Walmart

BY CSA STAFF

Walmart has long shunned outright sponsorship of a NASCAR team, while such other retailers as Target, Office Depot, Bass Pro Shops, Home Depot and Lowe’s have embraced the sport with much success. With most NASCAR fans already shopping its stores, Walmart has adopted for a more surgical approach, which is evident again this year as the company executes promotional events at stores in markets where races are being held.

Thenext big event is coming up in the Talladega, Ala., area where the Aaron’s 499 is scheduled for Sunday, April 17. A series of exclusive events will be held at four Walmart stores in Talladega and the nearby towns of Leeds, Oxford and Pell City beginning on April 13 and running through April 16. For example, the store parking lots will feature such interesting attractions as race car simulators and replicas of actual cars that will be in the race, many of which feature brand sponsors whose products are sold at Walmart such as Hefty, M&M’s, Cheerios, Oreos, Ritz, Coor’s Light, Keystone Light, Pepsi Max, Frito Lay and Coca Cola.

Races at Talladega are a big deal in Alabama so the presence of a bunch of colorful NASCAR show cars and simulators in the parking lots at Walmart is likely to attract quite a crowd.

“We’ve found that nearly nine out of 10 NASCAR fans chose to shop at Walmart,” said Walmart market manager Kevin Smith. “We wanted to provide Talladega race fans with unique Race Time experiences and unbelievable savings on NASCAR merchandise that you can only find at Walmart.”

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