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2ndRick
04-13-2011, 06:02 PM
http://www.bloomberg.com/news/2011-04-12/wal-mart-plans-to-reduce-space-for-electronics-in-stores.html


Wal-Mart Stores Inc. (WMT), the world’s biggest retailer, plans to cut back on space for electronics as sales in that category have declined, contributing to the company’s two-year U.S. sales slump.

The company, which is based in Bentonville, Arkansas, will reduce the floor space devoted to items like flat-screen televisions and give some of that space to apparel, according to Rosalind Brewer, who runs the Wal-Mart East division. Brewer spoke at a retail conference in Atlanta today.

The reduction is a reversal of Wal-Mart’s 2009 move to allocate 21 percent more floor space to entertainment gadgets and comes after electronics contributed to a 1.8 percent decline in sales at U.S. stores open at least a year in the fourth quarter, its seventh consecutive drop.

“It’s something Wal-Mart has needed to do for a year,” said Craig Johnson, president of Customer Growth Partners, a New Canaan, Connecticut-based consulting firm, in an interview. “You don’t need as much space in that area with products shrinking and purchases going online, and electronics has narrow profit margins. Floor space is a scarce commodity.”

At an investor conference last month, Wal-Mart’s U.S. chief Bill Simon said “we couldn’t possibly sell enough TVs,” during the holiday season to justify the space allotted to electronics. In February, Simon cited electronics as the “primary factor” for the company’s negative comparable-store sales result.

Best Buy, Amazon

David Strasser, an analyst at Janney Montgomery Scott LLC, said in a report today that Wal-Mart could reduce the electronics section by about 2,000 square feet per store. The New York-based analyst recommends buying the shares. Greg Rossiter, a company spokesman, said the space reductions will vary by store.

Retailers like Wal-Mart and Best Buy Co., the world’s largest consumer electronics retailer, have seen slowing sales of gadgets amid heightened competition from online retailers like Amazon.com Inc. Best Buy also is reducing the number of items it sells to focus on products that sell well, executives have said.

Brewer, who oversees about 1,600 stores, also said that Wal-Mart will resume sales of fabric and crafts products. Yesterday, the retailer said it was restoring 8,500 products to store shelves and kicking off an ad campaign in a bid to lift sales.

Wal-Mart rose 70 cents, or 1.3 percent, to $53.52 at 4:00 p.m. in New York Stock Exchange composite trading. The shares have fallen almost one percent this year.

To contact the reporter on this story: Matthew Boyle in New York at mboyle20@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

2ndRick
04-13-2011, 06:06 PM
Does anyone else find it ironic that the kings of price erosion are now making moved to increase their profit margins by moving IN more sweatshop apparel items and moving out the components from the retail electronics industry they helped destroy?

Oh well, they still have e-tail as their way to continue to screw up the marketplace.

What a fun time to be in the electronics business... :)

Late_Night_Bill
04-13-2011, 07:45 PM
Yea, that one is a classic. Now just waiting for 'The Onion' to do a parody on how "Walmart stores blaming Walmart.com for undercutting their margins, Film at 11"

2ndRick
04-13-2011, 07:46 PM
Yea, that one is a classic. Now just waiting for 'The Onion' to do a parody on how "Walmart stores blaming Walmart.com for undercutting their margins, Film at 11"

I have a friend who writes for the Onion... I will pass that along.

Fins
04-13-2011, 08:07 PM
Personally, I kind of see this as a bad thing. I didnt ever see WalMart competing for the same customers that we work for. But, I did see them overlapping with Best Buy's customer base enough to do some real damage to BB. WalMart could have sent them the way of Circuit City. And in the end that could have been good for CI's.

2ndRick
04-13-2011, 08:21 PM
Personally, I kind of see this as a bad thing. I didnt ever see WalMart competing for the same customers that we work for. But, I did see them overlapping with Best Buy's customer base enough to do some real damage to BB. WalMart could have sent them the way of Circuit City. And in the end that could have been good for CI's.

I sold retail when WM only carried products that were total garbage.

Now they have Onkyo, Sharp, Pioneer, Panasonic, and a bunch of other products that are straight out of the CI's stable of lines.

Trust me that this is a GOOD thing, and hopefully BB will decide to devote more floor space to microwaves and clothes dryers, Geek Squad infused laptops, and and Rocketfish USB and Firewire cables.

Ultimately, Amazon will win the war... Honestly, nobody else can even come close to competing because they all maintain hundreds (if not thousands in the case of WM) of the behemoth bloated air-conditioned buildings full of lights and inventory and half a billion little smock wearing liabilities.

I want to see some of the ammunition toned down from WM and BB until that happens.

Fins
04-13-2011, 08:34 PM
Now they have Onkyo, Sharp, Pioneer, Panasonic, and a bunch of other products that are straight out of the CI's stable of lines.

No, they sell a bunch of brands from the CI's stable. But they have their own model lines, where they have muscled the manufacturers into stripping down their stuff to make them crap. It may not go for every CI company, but for our area, potential CI clients arent going to WalMart.

Understand, I do agree this is a good thing, but I do think them eroding away at Best Buy was good too.

Trust me that this is a GOOD thing, and hopefully BB will decide to devote more floor space to microwaves and clothes dryers, Geek Squad infused laptops, and and Rocketfish USB and Firewire cables.


Ultimately, Amazon will win the war... Honestly, nobody else can even come close to competing because they all maintain hundreds (if not thousands in the case of WM) of the behemoth bloated air-conditioned buildings full of lights and inventory and half a billion little smock wearing liabilities.
.

Agreed. I dont know if you are aware, but Amazon has some automatic buying programs to make life more conventions for their customers. We have a customer that buys all their laundry detergent, cleaning supplies, and toiletries from Amazon. She set up the order once, specified how often for replacements are needed, and they automatically show up on her door step every month.

Seth_J
04-13-2011, 09:26 PM
Best Buy is becoming Amazon's showroom. Only a matter of time before they start focusing more on white goods...

AHEM
04-13-2011, 11:41 PM
What an exsiping time to be in the industry!

Pilgrim
04-14-2011, 01:04 AM
What an exsiping time to be in the industry!

Makes you proud,doesn't it........NOT!!!

tomciara
04-14-2011, 11:48 AM
Business always expands and contracts. Whether it is retail, CI, or whatever, when business booms, lots of folks/companies jump aboard to get the rewards. When things slow down, the healthier ones remain.

Everyone decries BB, Wal-Mart, the internet... is it like this is some new phenomenon? You are wasting your breath complaining about it.

In the 80's and 90's it was mail order. Open the back of an old Stereo Review and that was the competition for brick and mortar. "Unfair", "Giving it away", "Ruining the industry", and so on were the cries.

Rather than moaning and groaning and passing judgment on the latest of the low margin generation, you are better off looking for your niche, strengthening your customer service, following up with existing clients, and so on. A large outfit with all their shortcomings is no match for a small company with excellent customer service.

There will always be that sort of competition to complain about.

Seth_J
04-15-2011, 02:00 PM
A large outfit with all their shortcomings is no match for a small company with excellent customer service.

So true...

39 Cent Stamp
04-15-2011, 04:21 PM
Everyone decries BB, Wal-Mart, the internet... is it like this is some new phenomenon? You are wasting your breath complaining about it.


Agreed... And...

Aren't you guys tired of working for free trying to get this crap to work properly? Can you imagine how lovely the work day would be if you just had to show up at the clients house with your tools and bill for every hour you are there?