New, Upscale ‘Test’ Wal-Mart in Texas Sells Sushi, Fine Wines
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Wal-Mart Stores opened a new, upscale store in a Dallas suburb this week, but the company isn’t abandoning its focus on lower-income customers, a top executive said.
The world’s largest retailer yesterday opened a high-end version of its giant supercenter format in Plano, Texas, offering a wider selection of pricey electronics, home furnishings, fine jewelry, and gourmet foods including wines and cheeses. Meanwhile, the store won’t sell guns, and devotes less space to lawn and garden, fishing, camping, and auto supplies. The new store doesn’t house a McDonald’s, but it does feature a sushi bar.
Whether the store is successful or not, Wal-Mart has no plans to convert additional stores to the upscale format, the president of Wal-Mart’s stores in America, Eduardo Castro-Wright, told investors at a conference hosted by Merrill Lynch & Company that was available by Web cast. Rather, the new store is “one of the many tests we’re running” to boost the performance of Wal-Mart’s supercenters, he said.
“This is not directionally where we’re going,” Mr. Castro-Wright said. “This is just an attempt to understand that customer.”
Indeed, households in the well-to-do Texas suburb average an annual income of about $140,000, Mr. Castro-Wright said. That’s about three times the average for the clientele of Wal-Mart supercenters nationwide. Mr. Castro-Wright also noted that Wal-Mart separately has mounted new initiatives to better serve Hispanic customers, based on what it has learned at its stores in Mexico.
But Wal-Mart, whose 3,700 stores in America have begun to saturate their markets, will need to widen the appeal of its chain to keep sales and profits growing. Toward that end, Wal-Mart aims to lure wealthier shoppers into making more purchases at its supercenters. While they stop by Wal-Mart to buy basic supplies like diapers and baby formula, they tend to leave quickly thereafter to buy their clothes, furniture, housewares, and electronics elsewhere, Mr. Castro-Wright said.
The Plano store is part of a larger effort to make each of the company’s 2,000 supercenters do a better job of serving local clientele. In recent months, Wal-Mart has restructured its chain around “market managers” that oversee 10 stores each on average, keeping close track of local customer needs. The market managers are supervised by regional managers, who work with merchants, planners, and “sourcing” executives, who decide which products to buy from overseas manufacturers.
“We’re redefining the role of the buyer,” Mr. Castro-Wright said. “Their role will be the “customer advocate.'”