From The Wall Street Journal:
Wal-Mart Stores Inc. wants to charge more to buy some products online than in stores, part of the company’s efforts to boost profits and drive store traffic as it competes with Amazon.com Inc.
The world’s biggest retailer has quietly raised prices for some food and household items sold on its U.S. website, including boxes of Kraft Macaroni & Cheese, Colgate toothbrushes and bags of Purina dog food, according to people familiar with the matter and comparisons between online and in-store prices.
Some big-box retailers charge more for online purchases, including Costco Wholesale Corp. , but the move is unusual for Wal-Mart, which has long honed an “everyday low price” message and has worked to keep online prices at least as low as shoppers find in its 4,700 U.S. stores.
. . . .
In some cases, product listings on walmart.com show an “online” and “in the store” price. Often the online price matches Amazon.
“We always work to offer the best price online relative to other sites,” a Wal-Mart spokeswoman said. “It simply costs less to sell some items in stores. Customers can access those store prices online when they choose to pick up the item in store.”
. . . .
The higher online prices are part of Wal-Mart’s efforts to nudge more customers into stores as well as raise its e-commerce margins. Wal-Mart is investing billions to boost e-commerce sales, which rose 60% in the U.S. in the most recent quarter, but some shareholders worry the effort could drag on profits.
Marc Lore, head of Wal-Mart’s U.S. e-commerce unit, told investors in October that “this year should be the largest loss in e-commerce, and we’ll see slight improvement next year.”
. . . .
For inexpensive items, “there’s no cheaper way to get these products to consumers than have them come in the store and pick it off the shelf themselves,” Mr. Lore said at last month’s investor conference. He said he hopes shoppers will come to stores for the best price and place larger orders online to offset the cost of shipment.
Link to the rest at The Wall Street Journal
PG always becomes a bit uneasy when a large organization talks of “driving” its customers here or there to increase profits.
This “strategy” assumes a degree of control over customer behavior that can disappear very quickly. It can also backfire if customers feel they’re being manipulated.
PG never assumes that others will have the same attitudes as he does, but dealing with Amazon (or a good ecommerce site from Walmart or somebody else) is almost always better than going to a Walmart store.
When Walmart founder Sam Walton (“Mr. Sam”) was alive, he was insistently obsessive about both low prices every day and store cleanliness. And he staffed his stores accordingly.
Mr. Sam has been in his grave for awhile and Walmart has changed.
From The New York Times:
Walmart, the nation’s largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Walmart managers show the company grappling with low customer confidence in its produce and poor quality. “Lose Trust,” reads one note, “Don’t have items they are looking for — can’t find it.”
. . . .
“In its larger supercenter stores, Walmart can’t keep the shelves stocked, and that is driving customers away,” said Terrie Ellerbee, associate editor at the grocery industry publication The Shelby Report, in an e-mail.
She traced the problem to 2010, after Walmart reduced the range of merchandise it carried in an attempt to make stores less cluttered. Customers did not like the change, and Walmart added merchandise back, but with declining sales then, it did not add back employees, she said. “Without enough labor hours to get those items back, not to mention to do routine stocking, shelves were left bare,” Ms. Ellerbee said.
Link to the rest at The New York Times (Article from 2013, but from PG’s experience, nothing has changed since then.)
Amazon continues to make everybody crazy.