Walmart Gets Cheap

Walmart (NYSE: WMT) is known for “every day low prices.” It is probably the primary reason people shop there and it has made the company the world’s largest retailer.

Wal-Mart, for some reason, thinks it has to remind consumers of its greatest strength. It has just announced that “every day low prices” are at the core of the experience of its shoppers.

The firm issued a press release that stated, “Walmart’s reputation was founded on the principle of providing low prices day-in and day-out on the broadest assortment of merchandise,” said Duncan Mac Naughton, chief merchandising officer, Walmart U.S. “Our company is determined to create the best one-stop shopping experience and low prices on the right products backed by a clear, consistent ad match policy.”

Walmart has discovered that consumers forget what they stand for, even those that have been around for decades.  Many companies wind up learning this lesson the hard way.

Nokia (NYSE: NOK) was viewed until recently as the premier provider of quality handsets. It has begun to try to make that claim again–to remind people of its status. Nokia’s partnership with Microsoft (NASDAQ: MSFT) is meant to leverage its position as the largest cellphone manufacturer to a place as a major force in the smartphone business. That “message” may never get through to consumers. Most believe that Apple (NASDAQ: AAPL) holds the lead in the high-end part of the handset business, and it has been joined there by makers of Google (NASDAQ: GOOG) Android-based products.

Dell (NASDAQ: DELL) and Toyota (NYSE: NOK) are also in the middle of attempts to get consumers to recall what they once were–the makers of the best products in their industries which are affordable as much as they are innovative. The results so far are not encouraging for their managements.

Walmart has been besieged by rivals including Target (NYSE: TGT), Costco (NASDAQ: COST), and even Amazon (NASDAQ: AMZN). Each wants to siphon off some of Wal-Mart’s huge customer base which generated more than $400 billion in revenue for the company last year.

Walmart must believe the threats are real. Why else would it try to remind consumers of what they already know?

Douglas A. McIntyre