Independent retailers received a brief moment of happiness when big box retailer, Walmart, fell victim to economic hardship, helping to even the playing field for the rest of Main Street USA. For months, local discount stores and mom and pop shops have been witness to the fact that even the industry bigwigs aren’t immune to the recession. The Wall Street Journal confirms, saying, “Walmart’s U.S. business, which accounts for 62 percent of its $419 billion in annual revenue, has reported declining sales at stores open at least a year, for two consecutive years.” In fact, Walmart suffered a ninth straight drop in its U.S. store sales last quarter, even with the anticipated back-to-school shopping season, according to CNN.
Working Towards Recovery
Independent retailers are forewarned to keep an eye on the well-known competitor. Walmart is currently looking for resolutions to prevent any further decline in sales. Among these resolutions are:
1) Replacement of non-essential items such as clothing and home furnishings. Budgeted shoppers have increasd their spending on groceries and household goods. As CNN reports, “Recognizing these shifts in how consumers are shopping at its stores, Walmart this year started to add more groceries and household goods to its shelves, and said it would get even more aggressive on prices in order to grab more of its customers’ dollars in every shopping trip.”
2) The introduction of a buyback plan. For investor reassurance, Walmart has initiated a $15 billion share buyback plan. Shareholders involved in the program are no longer burdened by dropping stock price, but those holding on to their stock are watching as the Walton Family’s control increases. As the Bloomberg report states in a recent article, “Repurchases have boosted the founding Walton family’s ownership to about 48 percent as of March. It’s estimated the family may gain a majority of the shares by the end of next year.”
3) The effort to be green. And while most green initiatives and products are associated with high prices, Walmart doesn’t think its customers should have to choose between a product that is better for them and one they can afford. Leslie Dach, EVP of Corporate Affairs for Walmart, says in a recent interview with Fortune, “Being green will actually save money for all parties involved, the stores and customers. It will fuel the productivity loop, which helps Walmart lower costs and in turn, prices.”
4) The initiative to open smaller stores. As Walmart is running out of locations for its big shopping centers and running out of ideas to boost its declining revenue, the company is looking to roll out a nationwide implementation of small express stores. These 15,000 square-foot express convenience stores will allow Walmart to enter urban markets, as well as some rural towns.