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Are You Ready for the Walmart Pricing Challenge?

Author: Jon Hauptman

The Independent View

Willard Bishop

Are You Ready for the Walmart Pricing Challenge?  

 October 3, 2012 


Walmart has been blanketing markets across the country with ads highlighting the "Walmart Challenge," i.e., showing how much shoppers can save on a basket of groceries if they shop Walmart. These head-to-head retail comparisons—which often show the Walmart basket to be 15 to 20 percent cheaper—are obviously designed to attract shopper spending from other grocery merchants. The question is, what tactics can you use to effectively, responsibly and sustainably respond without "giving away the store"?

Consider these strategies:

  • Smooth out your rough edges. Ensure you are not unintentionally offering shelf prices that are disruptively higher than Walmart by setting and managing reasonable price thresholds. Plan for narrower price gaps on known-value items (KVIs) and wider—but not excessive—on background items.

  • Start with the end in mind. Endcaps represent the most valuable real estate in the store for sending a positive, appealing price-value message. Build large, impressive displays with one primary item and only one or two complementary items per endcap, and post the primary item's price and savings on a large sign. Messages such as "Save $1," "Save $2," "Save $2.50," etc. reinforce a strong price image, even if the shopper viewing them is not active in the categories on display.

  • Promote with passion. Being independent means you're closer to your shoppers and have more flexibility to work to meet their needs. Take advantage of that by offering fewer, deeper discounts (minimum of 10 percent savings) in the categories that you know matter most to your shoppers.

  • Deliver unique value. One of the most effective ways you can compete is with products and values not available at Walmart, i.e., your IGA Exclusive Brand Line! Be sure to feature, display and sample your value-priced IGA Brand items frequently to promote new trial and cement shopper loyalty.

  • Remember that romance is everything. If you want to attract and retain shopper spending, you must "romance" shoppers with special offers and services that they'll find unique and appealing. Highlight IGA national marketing events and sweepstakes opportunities, your IGALink digital shopper marketing tools, and any other loyalty marketing and in-store activities.

  • Shine a light. It's critically important to clearly and effectively communicate what makes your stores special. Tell stories about why your perishables are the best in the market, draw attention to all the unique products you offer, and perhaps most importantly for IGA retailers, shine a light on the fact that you're a "hometown proud" independent retailer who supports and gives back to the community you serve!


Jon Hauptman