Survey: Walmart tops in customer loyalty
New York City Walmart dominated a recent report on customer loyalty in the retail industry, with Costco, Kroger, Walgreens, BJ’s Wholesale, Meijer, Publix and H-E-B also ranking among the leaders. The results of the survey, entitled “What Price Loyalty? The 2010 Colloquy Retail Loyalty Index,” were far different than the last survey (2008) when customer service, store environment and a wide product selection were the underlying factors for customers’ self-professed loyalty.
“We’ve witnessed a profound change among consumers since the recession hit: Low prices have stepped up to become retail’s strongest loyalty lure according to consumers “That is something which was simply not true in 2008,” said Colloquy partner Kelly Hlavinka and author of the report’s white paper, “RetailTalk: What Price Loyalty.”
The 2010 index surveyed consumers in five regions: Northeast, Southeast, Midwest, Southwest and Northwest. Respondents were surveyed across four retail categories: grocery, department stores, mass merchants and personal care.
Walmart dominated the 2010 Retail Loyalty Index, leading customer loyalty ratings in virtually every category. According to Hlavinka, the chain’s decision to rebrand itself and change its advertising strategy seems to be paying off.
“Families see themselves in Walmart’s ads, saving more and living better, rather than a bouncing yellow smiley-face character,” she said. “Moreover, the message of low prices and value resonates with customers and leaves behind a feeling that Walmart is partnering with its customers to get through difficult times.”
But the data also indicates that companies that are implementing other strategies, including digital couponing offers, shopper marketing efforts and leveraging customer intelligence data, are holding their own against Walmart and its low-price focus.
“The glimmer of hope for retailers is that as jobless rates go down and consumer confidence returns, retailers may very well regain their footing — if they continue to work towards customer-centric solutions and more sustainable strategies rather than combating Walmart on low prices.”
Hlavinka said. “The bottom line for any retailer’s bottom line in today’s economic environment; You must find a way to become number one in something that affects consumers’ hearts and wallets — just as Walmart has done through pricing and value.”
Walmart increases charitable giving
BENTONVILLE, Ark. Walmart announced that its charitable giving in the United States totaled more than $467 million in cash and in-kind gifts in fiscal year ending 2010 (FYE10, Feb. 1, 2009 to Jan. 31) — an $89 million increase over the previous year’s giving. In international markets, Walmart gave $45 million in cash and in-kind gifts.
Walmart said an area it focused on in the United States was food banks, reporting that it had donated more than 127 million pounds of food, an increase of 81 million pounds over its fiscal year 2008 totals.
“We’ve challenged ourselves to look at ways to make long-lasting impacts in communities around the globe by funding programs that address critical needs, like hunger, education and job training,” said Margaret McKenna, president of the Walmart Foundation. “Our business is growing and as a result we’re fortunate that our charitable giving is increasing as well.”
Other donations included $100 gift cards presented to 40,000 teachers through Walmart’s Teacher Rewards program and more than 90,000 bottles of water, 24,000 blankets, 27,000 tents and more than 20,000 units of medical supplies like gauze and surgical masks for Haiti earthquake relief.
In addition, Walmart associates in the United States donated more than 1.5 million volunteer hours in 2009, a 25% increase over the previous fiscal year, the company reported.
Borders sees 4Q, FY earnings growth
ANN ARBOR, Mich. Borders Group reported that earnings per share from continuing operations in the fourth quarter improved to 91 cents from 48 cents in the same period one year ago. For the full year, the loss from continuing operations improved to $1.83 per share compared with a loss from continuing operations of $3.07 per share in 2008.
Comparable-store sales in the fourth quarter declined 14% and 8.5% in the Borders and Waldenbooks segments, respectively. For the full year, comparable-store sales declined 14.4% and 8.1% in the Borders and Waldenbooks segments, respectively.
“Restoring the financial health and profitability of the company remains our top priority,” said Borders Group interim president and CEO Mike Edwards. “We took important steps toward this goal with the long-term extension of our existing credit facility and the additional capital provided by the new term loan. We have made significant operational and financial improvements and will maintain those disciplines as we shift our focus now to growing market share by acquiring, engaging and retaining customers through a transformation of the Borders brand. I’m pleased with the cooperation we have received from our bank group, lenders, vendors, partners and associates who share our vision for a successful Borders.”
Total sales at Borders superstores in the fourth quarter were $723.1 million, down 14.2% from a year ago. For the full year, total segment sales were $2.3 billion, down 13.7% from 2008. Total fourth quarter sales at stores within the Waldenbooks Specialty Retail segment were $163 million, a 16.7% decline from same period last year. For the full year, total segment sales were $387.3 million, down 19.3% from 2008 due to store closures.