Will Wal-Mart trade up? can it?

By Published on .

Wal-marche it's not.

At Wal-Mart store No. 5261 in Pineville, Mo., 15 miles north of corporate headquarters in Arkansas, you can buy a bottle of Glenfiddich Scotch Whisky for $222.20, or a 1996 Dom Perignon for $151.33. Yet you can't find a handbag priced higher than $12.96.

Even if you wanted to trade up a bit to something better than the plastic-leather look, you can't. Same story in women's shoes. The faux-wood floors might be a step above the scuffed vinyl found at the typical Wal-Mart, but even the Dr. Scholl's leather sandals, at $12.84, are cheap and you'll know it.

Marketers have made much ado about "trading up" and creating aspirational brands. And that's clearly the Target brand formula. Wal-Mart's mind-boggling success and status as a retail juggernaut is due to a culture that is the antithesis of everything luxury branding stands for. The Wal-Mart brand isn't about aspiration, but necessity.

Wal-Mart must figure out what the Wal-Mart of the future will be. And the momentum is clearly behind the Supercenter format. With about 1,700 already open, Wal-Mart figures the U.S. can absorb 4,000 of the sprawling stores. So what will the next 2,300 look like?

Supercenter No. 5261 isn't your typical Wal-Mart, and Pineville isn't your typical town. The Pineville population is just 770, and boasts a median household income of $24,886. So who is buying that Dom Perignon?

Likely one of the thousands of Corporate America's transplants in Bentonville serving as the Wal-Mart suppliers-in-residence in Vendorville. With few wet counties in Arkansas, where else can you buy a proper bottle of champagne to celebrate striking a favorable deal?

Yet the Fine Wine & Spirits Cabinet that Dom Perignon is locked away in isn't exactly made of a substantial wood like mahogany or oak. It looks like the same flimsy display case in which they keep the Stetson and Jean Nate. It's right next to a red garbage can full of screw-top Arbor Mist wine singles going for $1.67 a pop.

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