Beating Walmart With Environment, Store Brands

A new report finds that stores with ambience and lots of private-label products could appeal more to consumers than the discount retailer.

July 28, 2010

CAMBRIDGE, Mass. - In many ways, Walmart, with its deep discounts and large selection, has redefined the retail environment. However, stores boasting personality, a wide selection of store-brand products and a consistent eye on keeping prices low might just beat the discount retailer, Marketing Daily reports.

A new report from Kantar Retail entitled "Challenging the Behemoth," looked at Wal-Mart and Market Basket, a regional grocery chain with 60 units in New England. Similar to Walmart, Market Basket has focused on low prices and a no-frills store design. The study compared the two stores on basket contents, merchandise variety, point-of-purchase displays and store environment.

The company found that Walmart was "decidedly less cluttered. It??s one thing to be clean and another thing to be antiseptic and sterile," said Leon Nicholas, director of retail insights for Kantar. Nicholas also authored the report with others. "Walmart can run that risk in some of its stores, where it has cleared out 'Action Alley.?? It may have created too much white space."

While Walmart clearly won on price, Market Basket still had good prices, especially on edible grocery products. The smaller grocer??s private-label items were also lower in price than Walmart??s store-brand versions. Market Basket had more of a selection, both in name brands and private-label products in two of three categories looked at.

Market Basket had way more ambience than Walmart. "Market Basket employed several means to suggest a more personal, authentic atmosphere," wrote the authors, indicating personalized interaction like handwritten signage, live pronouncements on the loudspeaker and employees available to help shoppers in the aisles.

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