Wal-Mart sees itself strengthened by ongoing discount wars in the retail sector

Germany boss Hafner expects positive operative cash flow and return on investment for the first time in 2004

According to statements by Wal-Mart Germany boss Kay Hafner, the discount battles in the German retail sector have significantly improved Wal-Mart's position. "Our philosophy of not taking part in one-off discounts and bonus battles and instead rewarding regular customers with a permanently inexpensive range of goods has paid off," said Hafner on Thursday, February 20th at the corporate headquarters in Wuppertal. "Our strategy of offering a wide range of goods at low prices over the long term will also be reflected in an improved operating result this year. Wal-Mart Germany will achieve a positive return on investment and a positive operating cash flow for the first time in 2004."

"Consumers increasingly find the constant special promotions and special prices annoying and are met with increased rejection," said Hafner, citing internal customer surveys, according to which "consumers find it inconvenient to have to go to numerous shops for individual bargains". Consumers consider a wide range of products to be inexpensive over the long term to be significantly more important and more customer-friendly. "That is why Wal-Mart will continue to pass on improvements in logistics and when purchasing goods to customers in the future," said Hafner. The magazine "stern" had recently reported similar results.

In its pricing strategy and the rejection of discount campaigns, Wal-Mart can also rely on the latest studies. Consumers are increasingly oversaturated and overwhelmed by discount battles and see taking advantage of special offers as a "second job", confirms a new study by the market research institute ifm effects + strategies in Cologne. The market researchers come to the conclusion that consumers want "clear prices" again. "Instead of panicky discount campaigns, today's customers are looking for stable, transparent market conditions - reliable low-price providers," is the conclusion of the study.

Wal-Mart's favorable pricing is rewarded in particular by a particularly high proportion of regular customers. Hafner: "These customers demand a wide range of goods at continuously low prices, which a discounter doesn't offer them." Above all, the international non-food competence of the largest retail group in the world benefits the customers. At the same time, Wal-Mart is continuing to expand its range of inexpensive private labels.

Hafner: "With the further development of product groups such as Smartprice and Great Value, we are following the wishes of customers who want to pay discount prices but want a Wal-Mart range."

Background Information - About Wal-Mart

In the United States, the Bentonville, Arkansas-based company has 1.476 Wal-Mart stores, 1.430 Supercenters, 533 SAM's Clubs and 60 Wal-Mart Neighborhood stores. Outside the US, Wal-Mart has 1.345 stores in 11 countries: 25 in Argentina, 225 in Brazil, 92 in Canada, 267 in Germany, 624 in the UK, 53 in Mexico, 33 in Puerto Rico, and 15 joint venture agreements in China and 1.500.000 in Korea. Wal-Mart employs more than 14.000 people worldwide, and around XNUMX people currently work for the company in Germany.

Source: Wuppertal [ wal-mart ]