Wal-Mart Stores has set its sights on the “global consumer of the future” – shoppers in developing markets who are “striving” to join the “emerging global middle class”.
Speaking at Wal-Mart’s annual shareholder meeting on Friday (3 June), president and CEO Mike Duke insisted that the world’s largest retailer was “best positioned” to capitalise on what he termed “the next generation consumer”.
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“Our next generation customer will include millions who are striving to join the emerging global middle class. They’re connected to the world through smart phones and social media. They’re in charge of when they shop and how they shop, and they know who has the lowest prices,” he said.
Duke insisted that Wal-Mart’s first priority was to increase sales by expanding its existing customer base and reaching new shoppers through store openings and acquisitions. He said that the company would extend its consumer appeal by remaining focused on EDLP (every day low prices), which are achieved through EDLC (every day low costs), allowing consumers to “live better” through the promotion of healthy foods and sustainable agriculture.
“Nothing builds more loyalty with customers than everyday low prices, Everyday low prices in every market. No exceptions. No excuses,” Duke said. “No one controls costs better than Wal-Mart because we do it for the right reason. It’s all for the customer.”
Duke also revealed that the company viewed third-party global e-commerce as an important pillar to support sales growth. “We can combine our stores, our systems, and our logistics expertise into one continuous channel to drive growth and serve the next generation customer around the world. In global e-commerce, we will not just be competing. We will play to win.”
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By GlobalDataLast month, Wal-Mart acquired a minority stake in Chinese e-commerce operator Yihaodian, which was the first online supermarket to launch in the country in 2008.
Duke was upbeat on the company’s prospects in its domestic market. In the US, Wal-Mart has struggled to deliver same-store sales growth as the polarisation of US consumers has meant that the company has lost the higher-end shoppers it attracted during the recession, while the difficult economic environment and rising fuel prices have hit spending in lower income brackets.
Commenting on Wal-Mart’s domestic outlook, Duke said the group has the “right plan” and is “gaining traction”. Last month, Wal-Mart saw its comparable-store sales fall for the eighth quarter in a row, although its comparable-store grocery sales were up for the second consecutive quarter.
Shares in the world’s largest retailer closed up slightly on Friday from an opening price of US$53.15 to end the day at $53.66.
