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BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - NewtonMP2100 - 10-13-2010
....gone....
Walmart Rolls Back Rollbacks: Food Prices at Two-Year High
.....Walmart has rolled back its rollbacks. Earlier this year, the retailer tried to spark sluggish U.S. sales by lowering its prices - already bargains - even further. One analyst called it "an initiative that screams: Price! Price! Price!" These rollbacks, as they are known in Walmartspeak and in the company's advertising, were intended to overwhelm the shopper. In May, according to one shopping website, the price of a 40-oz. bottle of Heinz ketchup, which had been $2.42, was chopped to $1. Kraft mac and cheese, which had been going for $3.58, was reduced to $2.50. The rollback of a 50-oz. bottle of Tide laundry detergent, which was priced in the $7.48-$8.12 range, gave shoppers a $2.50 discount. Walmart expected a flood of customers to its stores, which would help lift the company's stock out of its rut and get Walmart rolling again.
Instead, cutting prices depressed sales, as shoppers took the bargains and ran. For the quarter ending July 31, Walmart's U.S. same-store sales fell 1.8%. The company's same-store sales have now fallen for five straight quarters. Of the rollback strategy, Bill Simon, the president and CEO of Walmart U.S., told investors at a September conference, "It did not do what we had hoped it would do. It did, however, drive price perception. It did not drive sales or traffic." As a result, Walmart rolled back the deeper discounts, and prices started inching upward this summer. According to a new report from J.P. Morgan, the price of a 31-item basket from a Walmart store in Virginia rose 2.7% in September alone. Walmart prices have jumped 5% since the start of the year and have been at their highest levels in the 21 months J.P. Morgan has tracked pricing data.
While Walmart may have stopped giving away the store, that doesn't mean customers will be facing sticker shock. "Walmart still stands for low prices," says David Strasser, equity analyst at Janney Montgomery Scott. Of the five retail-store chains J.P. Morgan studied (Walmart, Kroger, Safeway, Whole Foods and Harris Teeter, a 192-store chain in the Southeast), Walmart still had the lowest prices....
no BACKSIES....????
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - jdc - 10-13-2010
And its not just Walmart that hurts -- Walmart hurts Heinz when they say "we are going to sell your $2.50 bottle of ketchup for $1, so instead of you making a $1 profit, you will now take a 50¢ loss..."
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - OWC Jamie - 10-13-2010
:agree:
Read this - worth the time
http://www.fastcompany.com/magazine/77/walmart.html
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - rjmacs - 10-13-2010
jdc wrote:
And its not just Walmart that hurts -- Walmart hurts Heinz when they say "we are going to sell your $2.50 bottle of ketchup for $1, so instead of you making a $1 profit, you will now take a 50¢ loss..."
Huh? Wha? Walmart absorbs the losses from these targeted rollbacks, not the producers. They didn't turn to Heinz and say, "We're planning to reduce our prices on your ketchup from $2.42 to $1, so accordingly we'll be purchasing them from you for $1.42 less/unit." Walmart has price-pushing power, but it's not quite that simple.
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - Dennis S - 10-13-2010
Here's an interesting article (a few years old) on the low, low price of Walmart's pickles:
A gallon-sized jar of whole pickles is something to behold. The jar is the size of a small aquarium. The fat green pickles, floating in swampy juice, look reptilian, their shapes exaggerated by the glass. It weighs 12 pounds, too big to carry with one hand. The gallon jar of pickles is a display of abundance and excess; it is entrancing, and also vaguely unsettling. This is the product that Wal-Mart fell in love with: Vlasic's gallon jar of pickles.
Wal-Mart priced it at $2.97--a year's supply of pickles for less than $3! "They were using it as a 'statement' item," says Pat Hunn, who calls himself the "mad scientist" of Vlasic's gallon jar. "Wal-Mart was putting it before consumers, saying, This represents what Wal-Mart's about. You can buy a stinkin' gallon of pickles for $2.97. And it's the nation's number-one brand."...
http://www.fastcompany.com/magazine/77/walmart.html
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - Acer - 10-13-2010
I don't know if they can pull it off with every company or did with the items in the story above, but Walmart very much can and will tell a supplier "We'll pay this price for your product. Take it or leave it." The supplier often has to take it, because Wally is the biggest game in town, and sometimes the only game in town. If you aren't on walmart's shelves, you are nobody. 800lb gorilla effect.
Used to know a member of a family-owned company that supplied garden shop plants for regional Walmarts. Walmart set the wholesale price to razor thin margins for them, and they took it.
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - pinion - 10-13-2010
rjmacs wrote:
[quote=jdc]
And its not just Walmart that hurts -- Walmart hurts Heinz when they say "we are going to sell your $2.50 bottle of ketchup for $1, so instead of you making a $1 profit, you will now take a 50¢ loss..."
Huh? Wha? Walmart absorbs the losses from these targeted rollbacks, not the producers. They didn't turn to Heinz and say, "We're planning to reduce our prices on your ketchup from $2.42 to $1, so accordingly we'll be purchasing them from you for $1.42 less/unit." Walmart has price-pushing power, but it's not quite that simple.
That's exactly what they do. And if Heinz complains Walmart will say "Fine, then we won't carry you anymore and you'll loose way more money than what you would have had you jsut gone with this for the short term." We watched a whole video about it in College about how Walmart screws everyone constantly and there's nothing anyone can do about it. I think that was the title actually.
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - kj4btkljv - 10-13-2010
pinion wrote:
That's exactly what they do. And if Heinz complains Walmart will say "Fine, then we won't carry you anymore and you'll loose way more money than what you would have had you jsut gone with this for the short term." We watched a whole video about it in College about how Walmart screws everyone constantly and there's nothing anyone can do about it. I think that was the title actually.
Is it this?
The High Cost of Low Prices
http://www.walmartmovie.com/
Jeff
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - DaviDC. - 10-13-2010
A 24 pack of Mt Dew was $5 for months but now it's $7.
There was a display at the front door proclaiming roll back on 2 litre bottles for $1.48 when the same has been sold for $1 at Piggly Wiggly for months.
Walmart is the closest grocery to me so unless I want to make a road trip, I don't have much of a choice.
Their take it or leave policy was why they stopped selling Rubbermaid products for years.
Re: BACK to basics?!....Walmart rolling BACK their 'rollBACKS'..... - decay - 10-13-2010
f-mal-wart.