Photo: Flickr / Mark Z.
Perhaps the only thing that you can’t get cheaper online is food.Walmart and other brick and mortar retailers have all discovered this and are relying on food to get customers in the store and to generate sales.
Rich Yamarone comments on this trend in a Bloomberg Insight (via John Mauldin):
Walmart continues to perform much better in the grocery aisle than in its apparel and footwear section. They are very much aware of how critical grocery items are to the consumer. In its last quarterly earnings conference call, Wal-Mart mentioned, “As we move into the second quarter, we remain mindful of potential challenges for our customers. The overall economy is still our customers’ main concern. In particular, they remain concerned about job security or the availability of jobs, followed by gas and energy prices and rising food costs. Food is consistently the top monthly expense outside of housing and vehicle payments.”
Yamarone also quotes Dollar Tree CEO Bob Sasser:
“Our expansion of frozen and refrigerated product continues. We installed freezers and coolers in 127 stores in the first quarter and now offer frozen and refrigerated product in 2,345 stores. We are planning approximately 325 installations for the full year. This important category is extremely productive.”
And Target CEO Gregg Steinhafel:
“We also completed more than 100 remodels, resulting in nearly 1,000 general merchandise stores that we’ve either opened or remodeled in the last four years. This means that even though we’ve reduced new store growth in response to the recession and resulting slowdown in commercial development, our store base is much fresher than before the recession began. Guests in these stores respond to the appealing environment by spending more at Target, as we capture more of their shopping trips. While the most visible change to these stores is the addition of a broader food assortment, including an edited assortment of perishable items, guests also respond to enhanced navigation, compelling visual elements, and our latest thinking in beauty, shoes, home, apparel, and baby.”
In addition to restocking their shelves, the stores are also looking into making their venues smaller.
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