Walmart Losing Business, Looks to Retool

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Wal-Mart losing businessNot all is well with the behemoth that is Walmart, and the reason leads directly back to your pocketbook. The dominant merchandiser in the U.S. has been losing business, and many, including the Wall Street Journal, speculate the reason is because it has lost sight of its core value, "Every day low prices."

The company, in an apparent attempt to compete with slightly more upscale stores such as Target, began to stock its stores with higher price-point fashion and trendy goods such as organic vegetables and fruits. In the meantime, the proliferation of dollar stores threatened to undermine its sales in staples and bargain-basement goods.J.P. Morgan Analyst Charles Grom monitors the monthly change in the cost of a 31-item basket of goods in his local Walmart, and it has been rising. In September of 2010 alone it went up 2.7%, and 5% overall for the year to that date.

Meanwhile, the company continues to see a decline in year-to-year same-store sales, down 1.8% in the fourth quarter of 2010 over the same quarter in 2009, this despite a fairly robust Christmas season in the U.S.

This also despite an influx of more prosperous shoppers during the depths of the recession. While the likelihood that these customers will continue to shop at Walmart is an unknown, the vendor who dominates the lower-income customer base may have weakened its hold on these customers with its attempts to be more of everything to all people.
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