Walmart hit by dollar stores
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Walmart is losing the race to the bottom.
The world’s biggest retailer — which fueled its rise during the past three decades by relentlessly undercutting the prices of competitors — is now admitting that it has lost some of its edge.
“We’re not as low as we used to be,” Chief Financial Officer Charles Holley told reporters yesterday after the mega-discounter reported lackluster second-quarter results.
US-based Walmart stores posted a 0.9 percent drop in sales at stores open a year or more — a keenly watched retail barometer known as comparable sales– their ninth straight quarterly decline. Walmart is “committed to having a positive [comparable sales increase] by the end of the year,” Holley said, repeating previous, still unmet pledges to reverse the slide.
A growing part of the problem, critics say, is that fast-growing dollar-store chains such as Dollar General and Family Dollar have improved their merchandise and selection of recognized brands in groceries and other household goods.
As a result, those deep-discount chains are stepping in as a viable alternative for an increasing number of budget-conscious shoppers.
Driving the point home this week, billionaire Warren Buffett’s Berkshire Hathaway disclosed it has accumulated 1.5 million Dollar General shares.
Buffett, who is known for making long-term bets on companies, joins New York hedge-fund tycoon Nelson Peltz on Dollar General’s list of big shareholders.
Globally, Walmart’s second-quarter sales rose 5.5 percent to $108.6 billion, boosted by international growth. A 5 percent increase at Sam’s Club, fueled by gasoline sales, resulted in flat sales overall for the US division.