Wal-Mart: It's all about opening price points now
June 13, 2001-- Home Textiles Today,
NEW YORK — Wal-Mart has shifted its focus to opening price points and will continue to hammer away at them while the economic climate remains uncertain, according to Tom Coughlin, president and ceo of the Wal-Mart Stores division.
Coughlin, speaking this morning at the Credit Suisse First Boston retail conference held here, noted: "It's the basics that make Wal-Mart tick, and they are more important today with the tough economy."
Food and consumables continue to drive the division - which includes U.S. discount stores, supercenters and Neighborhood Market convenience formats. Together, the two categories now account for nearly 36% of the division's sales, Coughlin said.
"We're seeing increases in the average traffic growth and in the average ticket," he added. "And the average ticket is increasing faster than the traffic."
Wal-Mart is also making "a real push" for private label development, Coughlin said. "The common misconception is that opening price points equate to low margins," he added, noting examples of private label products that have become top-sellers for the company. Among them: the BASIC bath towel, priced at $1.50, which is selling 600,000 pieces a week.
"When you have a quality product at an opening price point, the customer is going to react to that."
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