Apparel in Wal – Mart are meant to cover body and not to make fashion statement or look cool and chic in.That is what customers expect from Wal – Mart – to be dirt cheap.
Going upscale in clothingÂ won’t work for it because of Wal-Mart’s discount store experience and layout.It putsÂ clothing 20 feet away from groceries and can never hope to create the same ambience that consumers have shopping for clothes in a specialty or department store. Atleast that is what the recent slaes trends show.
In its weekly sales update on Saturday, the world’s largest retailer reported that October sales at its U.S. stores rose a much weaker-than-expected 0.5 percent. This figure is even lower than Wal-Mart’s recently reduced guidance of a 1 percent increase. It initially saw a 2 to 4 percent rise. CEO Lee Scott admitted the world’s biggest retailer has seen at least one big setback to its attempts to boost sales by offering fancier, higher-priced merchandise called “Metro 7″. Wal-Mart is under intense pressure to increase growth and fight growing competition from arch rival Target, and value-priced department store chains like J.C Penney.
It was probablyÂ a failed attempt byÂ Wal-Mart to emulate Target’s tremendous success with its “cheap-chic” merchandise approach. But expderts suggest that though Wal-Mart has to seek out new customers in order to grow, they can not engage in blanket upscale push with brands likeÂ the Metro 7. Doing it on a region by region basis throgh care ful store – profiling would make more sense.
Given Wal-Mart’s size and reach, the retailer is viewed by many investors as a measure of consumer sentiment. So, given the fact that two-thirds of economic growth is driven by consumers, a weak sales report for the discounter tends to make the stock market uneasy.