Excitement, action return to Walmart aisles
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.
Changing Channels — Hot products outside of food, drug and mass
NEW YORK — Sagging, the practice of letting one’s pants hang slightly below the waist in a way that exposes the underwear, is a fashion trend that has inspired heated debate of a sort unseen since the mink stole, pitting supporters of free expression against those who see it as indecent exposure. Like fur, it likely will stick around for some time, so inventor Andrew Lewis has taken the pragmatic route with Subs, launched by Hatch Ventures. Subs work like suspenders or garters, holding pants up so that they don’t fall down too low and inhibit wearers’ ability to walk and climb stairs. Subs retail for around $34.95, and products also come packaged in kits.
BOYNTON BEACH, Fla. — It may be stay- indoors season now, but spring will arrive in a few months, bringing Americans out for camping, fishing and other outdoor activities. United Spirit of America has unveiled Basic Edition, a line of personal care products designed for outdoor enthusiasts, military and law-enforcement personnel. The products make personal care easy while delivering protection against sun exposure, insects and germs. Products include a combination shampoo, body wash and shaving lather; a sunscreen spray that also acts as an insect repellant; anti-fungal foot powder; and anti-bacterial gel. Prices range from $1.99 for the antibacterial gel to $8.99 for the foot powder.
SAN ANTONIO — It’s common for parents washing babies’ cloth diapers to end up with an un- pleasant ammo- nia smell, but Texas-based Rockin’ Green has created a way to get rid of the scent. Funk Rock is designed to eliminate the ammonia smell that emanates from cloth diapers in half an hour or less. The product uses a natural ammonia-busting compound that eliminates odors with a few tablespoons. Funk Rock also works on odors from pets’ urine. It is available in 9-oz., one-month supplies for $12.95.
NEW YORK — It’s hard to convince most small children that medicine will help them when it tastes positively vile, but one doctor who encountered this dilemma with his two small children created Sippy Sure, a sippy cup that mixes medicine with more palatable beverages. The cup, launched by Iatrical Innovations, works by keeping the medicine and the beverage separate, but mixing them together when a child drinks from it in a way that will administer the medicine without the child detecting it. The cup retails for $8.99.
Dollar General raises guidance after strong Q3
GOODLETTSVILLE, Tenn. — Dollar General reported that its third-quarter net income was $128 million, or a diluted earnings per share of 37 cents.
Excluding a net loss of $8 million ($5 million after income taxes) relating to the early repayment of certain long-term obligations, net income for the 2010 third quarter was $133 million, or a diluted EPS of 39 cents, a 76% increase over net income of $76 million, or 24 cents per diluted share, in the third quarter of fiscal 2009.
The boost prompted the company to raise its full-year adjusted earnings per share guidance to the range of $1.78 to $1.81, Rick Dreiling, chairman and CEO said.
Net sales for the quarter increased 10.1% to $3.22 billion in third quarter 2010, compared with $2.93 billion in the year-ago period. Same-store sales increased 4.2% in the 2010 quarter and 9.2% in the 2009 quarter, with customer traffic and average transaction amounts contributing to the same-store sales increases in both periods.