Walmart bringing back brands

WalmartWalmart spent the better part of 2009 cleaning up stores and honing its product selection. Some brands and package sizes disappeared from stores and the move has been a big topic in retail circles and proved quite unpopular among Walletpop readers. So the news that Walmart is rolling back its own cutbacks should be welcome news.

"Project Impact" was an effort to clean up stores, reduce clutter, and expand some product categories including toys and consumer electronics. This meant there was room for fewer products, so Walmart began eliminating based on sales data. It was arbitrary, angered suppliers and customers alike, and gave its competition an edge by promoting products not available at the world's largest retailer.
In the end, reducing selection was not just unpopular, but unprofitable too. Actual profits may be up 22%, but thanks in part to Project Impact, Walmart suffered a decline in same store sales. These are sales at stores open at least one year and an indicator of retail health. They show whether a retailer is really growing its business with existing customers, or by adding new stores, profit centers, or simply cutting costs as Walmart did by eliminating some higher priced national brands in lieu of private label products.

But consumers were not happy and voted with their wallets.

Walmart actually saw store traffic decline last year. Often, when a retailer retools assortment or a manufacturer discontinues a product, there's some anger and disruption to sales in the short term. But things settle down and shoppers get used to the new order of things. Not so this time. Some of the brands Walmart eliminated, like Arm & Hammer liquid laundry detergent, amped up promotions at other retailers, particularly supermarket chains. Project Impact forced shoppers into the arms of Walmart's competition.

Reversing the move has given financial analysts reason to cheer, and plenty of shoppers too. This doesn't mean there won't be periodic re-evaluations of assortment, or that less prominent brands won't be eliminated to keep store clutter at bay. But if you've been missing a favorite brand, rejoice. It may soon be back at Walmart near you.
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