Beyond the grocery aisle… into high-margin style. Walmart's going for a new look (which could make it harder for you to reach the grocery section). The big-box behemoth remodeled six of its SuperCenter mega stores to focus shoppers' attention on clothes, makeup, pet supplies, and furniture — all items with higher profit margins than groceries. A $30 floral dress that costs $3 to produce typically brings home more profit than a box of cereal.
- Front and center: Picture snazzy mannequins under spotlights at the front of the store, eye-catching cosmetics displays, and colorful pet-supply sections.
- Try it on: At least 30 more Walmart stores have adopted elements of the fanci-fied makeover. Walmart’s trying to pump profits after posting a loss in its October quarter.
Come for the juice… stay for the jeans. As America’s largest grocer, Walmart has always used affordable groceries as a hook (groceries = over half of Walmart’s sales). As food inflation squeezed budgets last year, higher-earning households switched to Walmart for groceries. Now it hopes it can persuade them to spend on more than just hummus and salmon. But it might not be easy: consumers have been cutting back on discretionary merch spend.
Dress for the profits you want… because new looks can lure new pocketbooks. Walmart became the grocery go-to thanks to competitive prices and its network of 5K+ US stores. By spotlighting its fashion and makeup offerings, Walmart's hoping that grocery-hooked customers will venture past the grapefruits and toward the swimsuits.