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Planet Retail: Results Paint Mixed Picture for Wal-Mart

BY Marianne Wilson

There has been lots of buzz and comment over Wal-Mart Stores’ fourth quarter fiscal results. While the chain’s U.S. sales are rebounding, its quarterly profit and sales fell short of Wall Street expectations and its forecasts suggest that results in this quarter and fiscal year may again disappoint analysts.

Here are some interesting comments from Natalie Berg, global research director, Planet Retail, on the chain’s results:

“Today’s results paint a mixed picture. In the United States, Walmart is finally gaining traction by focusing on its core customers. Initiatives such as layaway and price guarantees have struck a chord with hard-pressed shoppers, while ongoing improvements in merchandising and availability have also helped to restore confidence. Walmart learned the hard way that it cannot veer too far from its core. Low prices and a wide assortment of brands are integral to its success.

That said, the key challenge for Walmart going forward will be maintaining this concept in the face of the ever-growing online threat. Walmart has been scrambling to make up lost ground in this area, and crucially now has a leadership team in place with the relevant experience to drive this forward. Walmart has been planting big boxes for the past 50 years but, like its global peers Tesco and Carrefour, is struggling to maintain its relevance in today’s digital world.

Going forward, Walmart’s brick-and-mortar strategy must become much more event-driven and supported with exclusive ranges to avoid direct price comparisons. While we maintain that Amazon poses the biggest threat, Walmart has the opportunity to leverage its physical store base. More needs to be done to create a seamless shopping experience across all channels.”


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NRF supports tax reform efforts

BY CSA STAFF

WASHINGTON —The National Retail Federation expressed its support for President Obama’s proposal for business tax reform, and pledged to work with the White House and Congress to win passage of legislation that would significantly lower rates in order to help retailers and other businesses create jobs.

“Tax reform is a monumental undertaking that can only be achieved with the backing of the President,” NRF president and CEO Matthew Shay said. “President Obama has put the power of his office behind this goal and made it clear we can no longer tolerate having American businesses saddled with the second-highest tax rates in the world. Lower taxes will make U.S. businesses more competitive at home and abroad, and will help create the jobs out-of-work Americans are looking to fill.”

The White House announced Wednesday that Obama will seek to reduce the current 35% top corporate tax rate to 28% in return for “broadening the base” by eliminating dozens of current tax credits and deductions. He also pledged to provide adequate transition periods to allow businesses to adjust to the new tax rules. But he also called for special benefits for manufacturing that would reduce that industry’s effective rate to 25%.

NRF has supported corporate tax reform that would eliminate most if not all credits and deductions rather than creating new ones, and favors an approach put forward by House Ways and Means Committee Chairman Dave Camp, R-Mich., to lower the top rate to 25% for both corporations and individuals. Many retailers are small businesses that pay their taxes utilizing individual tax rates.

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Save-A-Lot expands in Pennsylvania

BY CSA STAFF

ST. LOUIS — Supervalu subsidiary Save-A-Lot is expanding its presence in Pennsylvania.

The company is slated to open four new stores in Pennsylvania in February and March, bringing the total number of Save-A-Lot stores in the state to 76, the company said.

“We are excited to be opening more Save-A-Lot locations in Pennsylvania to meet the needs of consumers looking for access to affordable, high-quality food, fresh produce and meat, as well as other grocery items,” Save-A-Lot president and CEO Santiago Roces said. “With food costs on the rise, Save-A-Lot is an ideal solution for customers looking to save money on their grocery bills.”

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