Those who wonder what would happen if Wal-Mart lost its low-price leader status now have their answer.
Double-down.
In March, news reports in the United Kingdom showed unprecedented growth by discounters Aldi and Lidl, and no doubt Wal-Mart sees that pressure in the U.S. with Aldi’s growth and Lidl’s imminent arrival.
Wal-Mart embarked on a price-comparison test in the U.S., including on some produce department staples, and generally confirmed it is re-emphasizing its low-
price leadership.
The Packer’s Ashley Nickle talked to several retail analysts in late February. One says Wal-Mart must be at or below the discounters to compete with them.
Another says “Price is in essence what’s made Wal-Mart what it is. It’s price paired with assortment, but inherently they’re the low-price leaders, their everyday low price, their whole philosophy and who they’ve become over the decades is
based on price.”
The analysts also addressed whether Wal-Mart’s price cutting will affect all of retail. They were mixed.
In my mind, this question needed to be answered years ago. Are retailers going to compete with Wal-Mart on price or something else?
The ones who are around today wisely compete in other areas. With the rising power of the millennial shopper who is willing to pay more for fresh, organic or value-added, retailers can meet those needs better than many discounters.
Successful independent stores and chains in areas controlled by Wal-Mart work because they do their thing better than anyone else, proving there’s more to value than price.