Once again Walmart has its finger on the pulse of American consumers. Just when inflation is kicking in and the economy softens they are seeing strong growth. How? They are listening to the customer.
They are marketing aggressively and focusing on prices and values. This is just what the consumer wants to here right now.
From the St. Paul Pioneer Press:
Sales in entertainment were strong at Wal-Mart, with flat-panel televisions continuing to run in the high double-digit same store sales increases. Some retail observers see Wal-Mart's aggressive marketing of inexpensive electronics as a threat to Richfield [MN]-based Best Buy.
The Pioneer Press article also reports on flat sales at Walmart challenger Target, which has not changed their strategy of shifting up in brand quality and to a more upscale approach to merchandising
We are seeing the same thing in the restaurant market. Value sells. McDonald's is showing strong performance with increases in same store sales. At the same time, upscale restaurants are closing left and right.
Also, many entrepreneurs I know in the service sector are experiencing pressure from their customers to trim back pricing or risk losing customers to low cost competitors.
The advantage that entrepreneurs are supposed to have is our ability to be nimble. Now is a time to be very nimble.
Listen to your customers. Think like your customers. Your reality in should be built on their perceptions. Inflation is scaring them. Rational or not, it doesn't matter. It is time to focus on pricing and value.
