Wal-Mart Has Its Mojo Back - Giving Customers What They Want
The last couple of weeks have been interesting for Wal-Mart (WMT) shareholders. Fresh off the news that the stock was the best performer on the DOW Jones for Q1, investors got more good news:
- Wal-Mart's Great Value milk is now being sourced exclusively from cows that have not been treated with artificial growth hormones like recombinant bovine somatotropin [rbST]. Sam's Club is also exclusively offering milk selections from suppliers that have pledged not to treat cows with rbST.
- Later this month Wal-Mart will begin selling six coffees under the Sam's Choice brand in all of its U.S. stores. The line includes Sam's Choice Fair Trade certified coffee, Sam's Choice Rainforest Alliance certified coffee, and Sam's Choice USDA organic decaffeinated coffee. Wal-Mart also said the six coffees are certified as "carbon neutral" because Cafe Bom Dia, its Brazil-based coffee roaster, has cut its net carbon emissions to zero. A twelve ounce bag of the coffee will be priced about $1 lower than competitors' brands.
People want what they want and the current trend out
there is for organic products. Rather than rushing for the lowest price
milk and sourcing it from wherever, Wal-Mart is now listening to
customers and giving them what they want, at low prices.It would seem Wal-Mart has recognized that people are far more willing to pay $5.99 for a twelve oz. bag of organic coffee compared to $2.99 for a 12 oz. bag of hard brown beans. Now that the company has recognized this, the edge Target had over the chain is lost.
There is not an organization out there today that is more capable of sourcing and pricing its products to make them more affordable customers. Now that it has realized that people do want the things they want and the retail giant has decided to give it to them in better looking stores, the freight train that is Wal-Mart is back on track.
Disclosure: Long WMT.
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