Wal-Mart changes pricing, inventory policies

Rising inflation, a jobless economic recovery and past decisions to reduce product numbers had previously loyal Wal-Mart customers shopping elsewhere for those everyday low prices.

But the world’s largest retailer is responding, announcing Monday (April 11) it will do more to lower prices and will return about 8,500 items back to store shelves.

“Walmart’s reputation was founded on the principle of providing low prices day-in and day-out on the broadest assortment of merchandise,” Duncan Mac Naughton, chief merchandising officer, Walmart U.S., said in a statement. “Our company is determined to create the best one-stop shopping experience and low prices on the right products backed by a clear, consistent ad match policy.”

Wal-Mart sales in its U.S. division were up a scant 0.1% during fiscal year 2010. For the year, the Bentonville-based global retailer posted net income of $16.389 million, up 14.1% compared to the previous year. Total revenue for the year was $421.849 billion, up 3.4% compared to the 2009 fiscal year.

However, the closely watched same-store sales barometer showed Walmart U.S. down 1.6%, a surprising loss compared to the 0.2% decline in the previous fiscal year.

In the Feb. 22 fiscal-year earnings report, Wal-Mart president and CEO, acknowledged that past pricing and inventory decisions would take time to reverse. The company launched “Project Impact” in 2009 as part of a cost-cutting effort to reduce the number of store units in its vast inventory system.

“Some of the pricing and merchandising issues in Walmart ran deeper than we initially expected, and they require a response that will take time to see results,” Duke explained.

The February Consumer Price Index — as reported by the U.S. Bureau of Labor Statistics —  found that during past 12 months, the index for food at home has risen 2.8% and the index for food away from home rose 0.2% percent in and has risen 1.6% over the past 12 months. Also, the 11% increase in the energy index is the largest since May 2010, and the 2.3% rise in the food index is the largest since May 2009.

The company’s new advertising slogan — Low Prices. Every Day. On Everything. — begins today (April 11).

Key aspects of the new campaign include simplifying coupon ad match policies, having store managers check competitors’ prices more frequently, and increasing production selection by 11%.

As to the return of products, Wal-Mart provided the following points:
• Additions to the dry grocery aisles for products like pasta, beverages and snacks have been in progress and will continue;
• In the next few months, additions to fresh grocery and consumables, such as paper towels, toilet paper and laundry detergent, as well as health and wellness products, will be made;
• General merchandise categories like electronics, sporting goods, apparel, fabrics/crafts and outdoor living will expand later this year; and,
• Customers will be able to easily identify these items with new “It’s Back” flags on store shelves later this month.