A consulting company called Retail Forward is selling a research study called “The Age of Wal-Mart”, which says that the world’s largest retailer could grow to be twice its size over the next five years if it gains more market share in food, apparel and gasoline. To do this, Retail Forward says, Wal-Mart will have to sell new categories of merchandise, and move into new locations, as well as “appeal to new consumers, obtain greater share of wallet from its existing customers, and operate in new business sectors.” The Report predicts Wal-Mart will employ 5 key growth strategies: 1. Food: By 2006, there will be more than 2,000 Wal-Mart supercenters in the U.S., and Wal-Mart food sales will capture one-third of the increased spending nationally on food. Wal-Mart (including Sam’s Club) has already become the largest grocer in America, controlling roughly 14% ($96 billion) out of a $682 billion grocery store market. 2) Foreign expansion: “Wal-Mart will not be successful as a global retailer if its only advantage is price. It must also provide a superior shopping experience, strong localized merchandising, and a clear differentiation from competitors.” The report says foreign sales will have to be supported by U.S. expansion and moving into other businesses in the US with the same velocity it moved into food. 3. Fashion & Family: Wal-Mart has to target (pun intended) a more affluent customer in apparel and home goods, expand its range of merchanadise, improve the quality and variety of its non-food items, and develop strong private labels. 4 Format: To reach more markets and more consumers, Wal-Mart will have to build smaller food stores for urban shoppers, and develop drug stores, dollars stores, and convenience stores, and not just be supercenter focused. 5. Fringe: “Wal-Mart will seek to test the outer boundaries of what consumers are willing to allow Wal-Mart to be.” Wal-Mart will expand into “highly new and unusal categories”. After gas stations, the company could go into used cars, financial services (banking) home improvemente, and foodservice. Can painted shoelaces be far behind?
This report is not much of a leap. Wal-Mart is already experimenting with used car sales, is rapidly expanding internationally, controls a banking conglomerate in Arkansas, and is building smaller format stores. But what this report means is that more and more communities are going to be confronting, and battling, Wal-Mart. So truly the “Age of Sprawl-Busters” is likely to double in size over the next five years
