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Jennifer Marks

Going Back to Basics

Jennifer MarksJennifer Marks Editor-in-Chief
SOME 15 YEARS OR SO AGO, McDonald's was doing some soul-searching and trying to class itself up, as it does from time to time. (This was well before McCafe came along.)
     An opinion piece in a trade newspaper covering the food industry offered the following advice: McDonald's key driver is cheap kiddie meals stocked with cheap toys, and McDonald's should focus on being the best provider of cheap kiddie meals stocked with cheap toys that it can.
     In other words: Embrace your essence.
     I thought about that piece recently when Walmart's chief merchant told investors the company is bending its efforts toward being the best retailer of basics that it can. In soft home, that means bedding and bath, he said. I would interpret that to mean sheets and towels.
     Price reductions are a key part of this strategy, natch. But keep in mind that strategy is set against recent cycles of cost-driven price hikes. The cost of labor in China as well as the value of the yuan against the U.S. dollar are still significantly higher than they were four years ago, but they're better than they were eight months ago.
     It's also worth noting that when you sort sheets by best sellers at walmart.com what tops the list is a polyester (excuse me, "microfiber") set with a lead price of $14.88. Clearly, basics already resonate with Walmart's customer, and it doesn't get more basic than an all-poly sheet.
     Walmart has understandably fretted as the recession shifted a chunk of its core customer base over to the dollar store channel - whose leading retailers deserve credit for adding the fast-turning food and sundries to their mix that drives traffic.
     The challenge for Walmart is to find of way of doing basic that isn't boring. And now that Walmart is fighting to get its customers back from Dollar General, Family Dollar et al, that ups the stakes for those folks as well.
     As Shakespeare advised: To thine own self be true.
     P.S. The Happy Meal ranks among the Top 5 most popular McDonald's menu items of all time.

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