Roulston's Retail Consultant Bloomberg Interview on Wal-Mart Earnings and Outlook

Roulston Research’s Retail Consultant Craig Johnson of Customer Growth Partners recently appeared on Bloomberg discussing some of the major challenges Wal-Mart is facing moving forward. The company’s first quarter results beat Street expectations by 3 cents coming in at 98 cents per share. However, sales of stores based in the United States fell for the eighth straight quarter. Their core consumers have been hit hard by the economy and they have been losing sales to bottom-end food retailers like Aldi and Save-A-Lot. Wal-Mart’s super-center stores were created for the retail wars of the past but now consumers like convenience in addition to low prices so they have been shopping at other retailers. The company is rolling out smaller retail stores domestically to better compete with these stores but Craig feels they are 2-3 years late with this concept.

The other major problem the company has been having is that they have been losing sales to online retailers as consumers seek more convenience in their shopping habits. Consumer electronics has been a major growth driver for Wal-Mart over the past decade but the company has been losing sales to online retailers like Amazon.com. This is a major concern for them long-term and they have recently purchased online Chinese grocery store Yihaodian and social media start-up Kosmix, which is focused on e-commerce, to broaden their exposure in this area. However, in this space they don't have a major footprint and it will be one of their big challenges moving forward. You can view his whole interview at http://www.washingtonpost.com/business/johnson-says-wal-mart-losing-sales-to-online-retailers/2011/05/17/AFMZzo5G_video.html