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BENTONVILLE, Ark. — Walmart stores have regained a familiar feeling this holiday season, and if senior executives are right, the increased promotional intensity will halt six consecutive quarters of declining same-store sales and put the company on the right track for 2011.
The most obvious change is the return of branded feature displays and four-sided fixtures to the main aisles of Walmart’s 3,600 U.S. supercenters and discount stores. Under the leadership of a prior senior executive team, Walmart abandoned this hallmark of its merchandising strategy in an effort to simplify the shopping experience in its large stores. The elimination of the displays was one element of an overarching strategy known as Project Impact that also involved store remodels and such operational changes as improved labor scheduling. Suppliers howled when the change was made in the name of bringing clarity to the customer experience, and that rationale also was the basis for paring product assortments and restricting how suppliers featured branding elements in the design of the remaining feature displays.
As Walmart has moved in a new and familiar direction under a different senior leadership team (see story below) and a restructured merchandising organization focused on the familiar brand promise of everyday low prices, it has sought to retain the best elements of its Project Impact strategy while modifying those that negatively affected sales, the most notable of which was the elimination of feature displays. “Customers are also happy with the Action Alley [displays] because of the price intensity and product availability that they deliver,” Walmart U.S. president and CEO Bill Simon said when the company released third-quarter results. “In addition, because they are pallet driven, the Action Alley displays are very efficient from a labor standpoint.”
The change wasn’t enough to help third-quarter same-store sales, which declined 1.3%, but Simon said a positive comp is expected for the fourth quarter. Walmart won’t provide guidance for the coming year until the release of its fourth-quarter results in mid-February 2011, but the company’s suppliers are optimistic. More than half of the 139 predominantly Bentonville-based supplier executives who participated in a recent survey conducted by Connecting Northwest Arkansas, a sister publication of Drug Store News, expressed a high level of agreement with the assertion that the changes made at Walmart U.S. in the areas of senior leadership, merchandising strategy and structure and philosophy toward supplier relationships would lead to an improved performance in 2011, even without an economic recovery.