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WHERE DID

SHOPPER GO? It’s not so simple as trading down to the dollar channel. NEW REPORT FROM WSL /STRATEGIC RETAIL

CURRENT DATA + TRENDED + ACTIONABLE + PREDICTIVE


whether Walmart is your biggest customer or biggest competitor

you need to understand

MYTH

1

Recession or Not, I’m going to Shop. Walmart’s core shopper is gone. Not so. The core Walmart shopper is still there, going even more often, and relying on Walmart now more than ever... but its core shopper is not enough.

and what does a

post Walmart world look like for you This report debunks several myths surrounding the decline in Walmart’s US sales, and gives you an action plan for a post-Walmart world.

MYTH

2

The core Walmart shopper drives the company’s sales. Unlikely. The core Walmart shopper can’t pull Walmart out of this hole. They are less than half of all its shoppers, and they don’t have enough money to spend to reverse the decline.


MYTH

6

Walmart shoppers have less to spend. Yes, especially its core shoppers. The more affluent shoppers, who are rarely in Walmart, didn’t find enough reason to stay.

MYTH

5

The “nicer shopping experience” has damaged Walmart. Not exactly. Overall, the improved Walmart shopping experience gets good reviews from shoppers – at least from the half who noticed.

So now what?

Without EDLP, what does Walmart stand for? Is the passion for Walmart over? Is Walmart now just another store?

MYTH

4

Walmart stands for EDLP.

MYTH

3

Walmart shoppers are now

Not anymore. Walmart used to own the low price message, but its competitors shouted “low price” during the recession, and shoppers listened. (Which is why you can’t blame all Walmart’s woes on Dollar stores.

in Dollar Stores. Don’t blame it all on Dollar stores. Every channel is doing its part to undo Walmart.

® REPORT S P O H S AMERICA THIS HOW LD ART WOR M L A W T S PO YOU IN A R O F S P E ST 8 ACTION S E D U L C IN

CONTACT US 307 SEVENTH AVENUE SUITE 1707 NEW YORK NY 10001 T 212.924.7780 F 212.924.7608 E INFO@WSLSTRATEGICRETAIL.COM


HOW AMERICA SHOPS® WHERE DID THE

GO?

METHODOLOGY Internet survey; conducted April ‘11. Nationwide sample of 1500 adults BY YZED L A N A

»» Total »» Men and Women »» Income: under $25K, $25-$49K, $50K-$99K, $100K+ »» Age: 18-34, 35-54, 55+

A WALM

S

R CELL

OPPE RT SH

»» Frequent Shopper »» Occasional Shopper »» Rare Shopper

RIES

O CATEG DUCT

PRO

HEALTH & BEAUTY

Hand & Body Moisturizers Cosmetics (WOMEN ONLY) Fragrance (perfume, cologne, etc.) Hair care products Men’s grooming products OTC Medication Skin care products Lip care (to prevent dry, cracked, etc.) Vitamins/nutritional supplements

BABY

Baby personal care (lotions, soaps, etc.)

CLOTHING & FASHION

Active Wear Clothing Fashion accessories Shoes (casual, dressy, sandals) Sleepwear/ Loungewear/ Lingerie

HOME

Home décor (pillows, bedding, etc.) Home fragrance/candles

FOOD, BEVERAGE and GROCERY

Bottled water Breakfast cereal Candy Carbonated beverages/ soda Coffee (instant or ground) Dairy/milk/eggs Ice cream/yogurt Laundry household cleaners/ paper goods Organic/Natural foods Pet supplies Salty snacks (chips, pretzels) Tea

PRICING

REPORT / ADD-ON: WORKSHOP / PRESENTATION For more information or to order by credit card, please contact us at info@wslstrategicretail.com or 212.924.7780 (Businesses in NY state, please add 8.375% NY sales tax)

As retail strategists and shopping futurists, we are recognized for our ability to turn shopper insights into smart actionable strategies. Never before has this been so essential. So let us help you navigate this new shopping world. 307 SEVENTH AVENUE SUITE 1707 NEW YORK NY 10001 T 212.924.7780 F 212.924.7608 E INFO@WSLSTRATEGICRETAIL.COM


IN THIS REPORT 5 BACKGROUND & OBJECTIVES 6 METHODOLOGY 8 HOW TO READ THIS REPORT 9 EXECUTIVE SUMMARY 25 DETAILED FINDINGS ...

...

...

...

...

25 . . . Chapter 1: Where Did the Walmart Shopper Go? 29 . . . Chapter 2: The Walmart Shopper: Who Stayed, Who Left 35 . . . Chapter 3: Going Less, Spending Less, and Why 47 . . . Chapter 4: Where is the Walmart Shopper Going? 51 . . . Chapter 5: Walmart Shoppers in Dollar Stores 59 . . . Chapter 6: The Image Challenge to Walmart 65 . . . Chapter 7: The Impact of Walmart Store Changes 75 . . . Chapter 8: Choosing Walmart - Category by Category 81 . . . Chapter 9: The Economic (And Gas Pinch) Outlook for Walmart Shoppers

87

...

APPENDIX


WALMART SHOPPERS SHOPPING DOLLAR STORES A majority of Walmart shoppers (59%) shopped Dollar Stores in the past 3 months. PROPORTION OF WALMART SHOPPERS SHOPPING DOLLAR STORE

WALMART/ NOT DOLLAR SHOPPER

41%

59%

WALMART/ DOLLAR SHOPPER

(PAST 3 MONTH SHOPPERS)

74% of Walmart shoppers are in Dollar Stores at least once a month. 49% are there several times a month. That’s a lot of cross-shopping, and shows how important the Dollar channel is to Walmart shoppers. Frequent Walmart shoppers shop all stores more often, and that holds true for Dollar Stores, too. • 82% of Frequent Walmart shoppers shop Dollar Stores each month. • Two-thirds of Occasional and Rare Walmart shoppers are also in Dollar Stores every month, but fewer of them go weekly (18%-19%). WALMART SHOPPERS: SHOPPING FREQUENCY AT DOLLAR STORES TOTAL Walmart Shoppers

52

HOW AMERICA SHOPS ®

Where did the Walmart Shopper Go? © WSL STRATEGIC RETAIL 2011

SHOPPING FREQUENCY FREQUENT OCCASIONAL

RARE

Base: Past 3 Month Dollar Store Shoppers

845 A %

(Once a Week or More) 396 B %

(2-3 Times a Month) 203 C %

(Once a Month or Less) 224 D %

% of Total Walmart Shoppers

59

65

59

52

Shop Dollar Stores - Monthly or More

74

82 DE

68

67

- Once a week or more often

22

27 CD

18

19

- Once every 2 to 3 weeks

27

28

27

25

- Once a month

25

27

23

23

Shop Dollar Stores - Less Than Once A Month

26

18

32 B

33 B

- Once every 2 to 3 months

16

12

19 B

20 B

- Once every 4 to 6 months

5

4

6

6

- Less often than every 6 months

5

2

7B

7B


GOING MORE TO DOLLAR STORES 41% of Walmart shoppers are shopping Dollar Stores more now than a few years ago, for a net change of +24 ppts. • Interestingly, it is the Rare Walmart shoppers who are going more often since the downturn. The net change for Frequent and Occasional Walmart shoppers is +19 ppts vs. +34 ppts among Rare shoppers. CHANGES IN SHOPPING FREQUENCY AT DOLLAR TOTAL Walmart Shoppers

SHOPPING FREQUENCY FREQUENT

OCCASIONAL (2-3 Times a Month) 203 C %

(Once a Month or Less) 224 D %

RARE

Base: Past 3 Month Dollar Store Shoppers

845 A %

(Once a Week or More) 396 B %

% of Total Walmart Shoppers

59

65

59

52

- More often

41

39

41

44

- Less often

17

20 D

22 D

10

- About the same

42

41

37

46

Net Change

+24

+19

+19

+34

Go to Dollar vs. a few years ago…

SPENDING MORE AT DOLLAR STORES 37% of Walmart shoppers are spending more at Dollar Stores compared to a few years ago. Half as many, 20%, are spending less, for an overall net change of +17 ppts. • Again, Rare Walmart shoppers show a higher positive net change in spending at Dollar. This, along with their going to Mass Merchandisers and Supermarkets, as well as Dollar means Walmart appears to be losing more of this shopper. CHANGES IN SPENDING AT DOLLAR TOTAL Walmart Shoppers

SHOPPING FREQUENCY FREQUENT

OCCASIONAL (2-3 Times a Month)

(Once a Month or Less)

(Once a Week or More)

RARE

Base: Past 3 Month Dollar Store Shoppers

845 A %

396 B %

203 C %

224 D %

% of Total Walmart Shoppers

59

65

59

62

Spending at Dollar stores vs. a few years ago… - More often - Less often - About the same

37 20 43

36 23 D 41

35 21 D 44

37 13 50 B

Net Change

+17

+13

+14

+24 HOW AMERICA SHOPS ®

Where did the Walmart Shopper Go? © WSL STRATEGIC RETAIL 2011

53

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