Filed under: Competitive strategy, Wal-Mart (WMT)

Wal-Mart Stores, Inc. (NYSE: WMT) has been trumpeting the fact for over a year now that it wants to get more higher-income shoppers into its locations to buy more higher-margin goods. Is it winning that strategy? Wal-Mart U.S. Chief Eduardo Castro-Wright indicated this week at a Lehman Brothers conference that not only is the retailer keeping its core base of low to mid-income shoppers, but it’s recruiting more affluent ones too.

The reason? The economic downturn that’s seeing energy and gas prices at their highest levels in decades plus the rising cost of food — among other things. Castro-Wright said that while Wal-Mart is reaching more affluent customers at this point in time, the real zinger is that the retailer is in a position to keep them shopping at Wal-Mart once the economy improves. That’s what Wal-Mart always wanted — growing its long-term customer base.

The actual shopper demographic Wal-Mart is talking about here contains those shoppers making $55,000 to $70,000 per year (or more), of which February traffic increased 0.7% and increased 2.2% in March. Wal-Mart’s old staple, low prices, seems to be the biggest hit with customers right now — even though Wal-Mart dropped the “Always Low Prices” moniker into a more self-help motto like “Save Money. Live Better” last year. One large change I witnessed recently that’s definitely geared towards the more affluent customer was the home electronics section, which resembled a high-end electronics store more than a big-box mass merchant.

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This entry was posted on Thursday, May 1st, 2008 at 5:16 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.