Walmart’s Identity Crisis, and the Betrayal of the Blue-Collar Shopper

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The world’s largest retailer is suffering through its worst-ever sales period on home turf. Why?

As many sources in a WSJ story explain, Walmart just lost its focus: While trying to attract more upscale shoppers, the retailer effectively turned its back on its bread-and-butter blue-collar clientele. Apparently, Walmart’s core discount shoppers aren’t fans of initiatives that include filling shelves with more fashionable clothing, organic foods, and other higher-priced items. Based on the retailer’s poor sales recently, the message shoppers seem to be sending Walmart is: Don’t try to be Target or Whole Foods.

Also, don’t play games with pricing. At first glance, Walmart’s “rollback” pricing scheme seemed appealing. But while the strategy drew in some shoppers with lower prices on select items, it was combined with a rise in prices on many other goods—annoying many customers who embraced Walmart for its “everyday” low prices on anything and everything.

Here’s a telling quote from a former Walmart exec:

“The whole rollback thing spread like a cancer, and it is systemic,” said Scott Edwards, a former regional vice president of operations at Wal-Mart who left the company in 2005. “Now Target doesn’t have to lower prices, because we have raised ours. I think we have alienated a lot of blue-collar shoppers,” he said.

And another, from another former executive who feels Walmart let its core customers down:

“The basic Wal-Mart customer didn’t leave Wal-Mart. What happened is that Wal-Mart left the customer,” said former Wal-Mart executive Jimmy Wright, who supervised the company’s distribution networks from 1992 to 1998 before leaving to co-found consulting firm Diversified Retail Solutions.

For many shoppers, Walmart’s shifts amount to a sell out, in which the retailer has disavowed its low-cost, blue-collar roots and taken for granted what have been its most loyal customers, all while in the hunt for richer and trendier customers. And after selling out, so to speak, the retailer clearly isn’t selling as much as it would hope.

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