US retailer Walmart is planning to invest $6 billion in its retail pricing by 2017.
Speaking at the retailer’s 19th annual meeting for the investment community, Walmart’s Duncan McNaughton said the company’s $6 billion investment in pricing would be broad-based, but primarily in food and consumables. The company would deliver on its pricing promise “through productivity initiatives, logistics initiatives and cost-of-goods savings”, he explained.
Advertisements comparing Walmart’s prices for basket of goods against local competitors are working, said Walmart’s chief merchandising officer. Pricing intelligence revealed that comparable sales and traffic was up one per cent when compared with a control group of stores, “which means those efforts are resonating with customers”.
The price comparison campaign is now running in 31 US markets accounting for about 40 per cent of the company’s food sales. Walmart says that the average price difference is 17 per cent against food competitors and 20 per cent against health and wellness competitors; this includes a price difference of 23 per cent against its competitor Safeway, 22 per cent against Albertsons, 15 per cent against Publix and 12 per cent against Kroger, explained McNaughton. Competitor price monitoring is now an essential retailing task in order to grow sales and profit margins in today’s economic climate.
The retailer is also focusing on merchandising by stocking good, better and best selections, relevant brands and localising its assortment. “We’re going market by market, category by category, brand by brand and product by product — ping deep into what product sells for, not shelf prices or average prices, but at what decile the product is moving and where we need to be priced.”
Pricing intelligence company Profitero provides retailers with actionable price intelligence data, monitoring over 50 million products across 4,000 eCommerce retailers every day, observing pricing, promotions and stock availability. We work with the world’s leading retailers, enabling them to acquire new customers and grow profit margins by monitoring and responding to changes in competitor pricing and promotional activity as they happen. For more information on Profitero price intelligence and competitor monitoring, visit www.profitero.com or email firstname.lastname@example.org