why walmart\'s grocery business won\'t get destroyed by its new european rivals

by:Chengbai     2020-06-10
Will cut-
Rating German grocer Aldi and Lidell to destroy Wal-Mart Stores(WMT -Get Report)
As they rapidly expand the U. S. marketS. presence? Probably not.
Aldi said in June that it will add 400 new stores in the current US market by 2018. S.
The number of stores is 1,600, and the expenditure is $1.
6 billion 1,300 per cent of these sites were renovated.
To 2022, the United States of Aldi. S.
With Aldi spending $3, the store base is expected to reach 2,500.
4 billion new locations, USAS.
Investment of $5 billion.
Although Aldi already exists in the United StatesS.
Rival Lidl, which has a market share of about 3% of edible groceries in the country since 1976, has only entered the country and opened 15 new stores in June, mainly in the southeast.
Bernstein analyst Brandon Fletcher expects Lidl to build 100 to 200 new cars in the United States. S.
Every year, there are about 600 U. S.
By 2022, he expected American stores in German stores to be merged togetherS.
The market share reached 7%.
When Lidl strives to win enough customers, Wal-Mart is ready for the challenge.
The model that Lidl pursues in the United States is different from the one that is perfected in Europe: to attract richer customers, square per square foot is higher than Aldi, and to run profitable stores.
Bruno Monteyne, an analyst at Bernstein, points out that falling prices are a quirk; affluent U. S.
Customers still believe that falling prices mean falling quality.
\"The goal of Lidl to attract a richer customer base does not work.
It\'s still limited.
\"Classified retailers, lack of key brands, currently have limited appeal in the US,\" he wrote . \".
Not to attract trader Joe.
And whole food.
Style customers, who are fighting for the same customers as Aldi and Wal-Mart, \"failed as a result.
Low against German rivalscost in-
Shop shopping is also contrary to the trend in retail industry, where \"we have seen a huge push into multi-channel or omni-channel,\" J.
Neely, head of global M & A strategy practice at Accenture Consulting (ACN -Get Report).
\"Pure concept --
The game almost began to disappear.
In a way, each player is starting to earn 1 feet on some digital channels.
\"The special challenge in the grocery industry is to master the right mix of channel products, including online, subscription, physicaland-
Mortar, delivery, etc, he added.
In Wal-Mart\'s most recent investor day speech, the third slide is focused on the online grocery store, which shows that this is a key priority for CEO Doug MacMillan.
Wal-Mart\'s price is similar to Lidl\'s, while Aldi\'s price is lower, which makes consumers rarely choose Lidl.
In addition, Aldi and Wal-Mart managed to lower their prices at locations near the Lidl store, a \"intense upfront
Pre-emptive response. . [which]
\"It seems to focus on hurting the Lidl entry and it is working,\" wrote monmont . \".
Aldi has mastered keeping it low cost, storing 90% private label products, charging for shopping bags and shopping carts, and Fletcher notes that the product is displayed in their shipping boxes instead of promoting the phone number of the local store, that way the staff won\'t call.
1,400 shares-keeping units (SKUs)
Per Aldi store is a small part of Wal-Mart\'s 90,000 sku, and Aldi\'s merchandise is \"almost exclusive \". . . low-profit grocery.
At Aldi and Lidl, 94% of American customers in stores \"can hardly have completed a full grocery trip\"K.
Customers visit their main competitors at least once a month. U. S.
Consumers don\'t accept this \", so even if hard discount stores manage to get sales from large grocers, the share they get will be the least --
\"Profitable goods and large grocery stores still need to be sold where they make the most money,\" Fletcher said . \".
Wal-Mart will continue its efforts after its new competitors;
Fletcher pointed out that although it is \"one of the world\'s most efficient retailers\", its grocery business margin is only 3%, and it has \"advanced\"
In contrast to the larger decline in profit margins in the United States, the index has \"dropped significantly\" by more than 1% since 2015. K.
Retailers like TescoThe tech-
The high cost of investing heavily in creating a omni-channel experience, and companies like Aldi and Lidl may not be willing to give up costs --cutting focus.
For example, Wal-Mart recently launched mobile returns based on existing features such as mobile pharmacies and transfers. Walmart\'s $3.
Acquisition of 3 billion e-ended on September 2016
Jet Business Company
Next is the recent e-commerce.
Business acquisition-
Startups like Modcloth, Moosejaw and Bonobos are now part of Wal-Mart\'s e-commerce
Chuck Grom, an analyst at Gordon Haskett, said business was stable and \"significantly\" improved Wal-Mart\'s brand awareness, which made Wal-Mart in the future
Wal-Mart also announced on investor day on October that it would expand its own-brand products. 10 that Jet.
Com will also have its own brand J, a \"more advanced\" brand across categories.
Wal-Mart is no stranger to this category: Jet founder Marc Lore points out that Wal-Mart has three of the country\'s top five private label brands, and \"many [\"other]billion-
$ Own brand.
\"The overall size of Wal-Mart in the United StatesS. e-
Karen Short, an analyst at Barclays, said the business was undervalued, noting that if sales in this segment were from other companies focused on e-commerce
Wal-Mart\'s market value will increase by about $100 billion.
As the business is not profitable, Wal-Mart investors are focused on revenue, not stocks, the size and growth of e-commerce
Business operations are not popular with the market, says Short.
The source of Wal-Mart\'s products is also changing, which will undoubtedly help to reduce costs and compete with companies such as Aldi.
He touted a \"cost reduction project\" called \"Cost Analysis\", which is actually a more realistic fact --
Whether it\'s a large brand vendor or a private label vendor, our negotiations with both vendors are based on \"success \".
Campbell Soup(CPB -Get Report)
One of the victims of recent supplier negotiations.
CEO Dennis Morrison said in August that the company had failed to \"reach an agreement with a big customer on soup\'s promotion plan \".
\"It is generally believed that the customer is Wal-Mart, which is about fifth in sales of Campbell Soup.
\"Changes in population structure, changes in consumer preferences for food, with emphasis on freshness, health and health
Morrison told analysts that as one of the many changes food companies are struggling to cope with, the increase in snack behavior, a series of socio-economic forces and technological advances \".
Food industry super-
She added: \"The competition is fierce because\" valuable players have expanded their presence in the United StatesS.
, Store brand growth and e-
Disrupting the business and delivery services of the market.
\"A grocery veteran, affiliated with Morrison, said Wal-Mart has never been a shrinking violet in pricing, and that its struggle with suppliers is much more intense than in recent years.
Wal-Mart is also trying new
Shop experience.
In section 3, retailers have launched a technology startup incubator
Working with Arianna Huffington\'s global prosperity and Accentureto, initially focused on virtual reality in the grocery space.
Wal-Mart, for example, is already training its employees using VR technology.
Finally, store number
According to Oliver Chen, an analyst at Cowen, this will allow Wal-Mart to \"redefine the physical store experience of the future \".
Aldi is in trouble as Lidl tries to find the right identity
At Wal-Mart\'s rate of response, Bentonville can be assured that its multi-billion-dollar digital innovation will avoid competition.
In the end, Wal-Mart\'s sheer size makes any attempt to fight it insignificant.
The company says 99% of Americans live less than 10 miles from Wal-Mart, and it can offer next-to 87% of Americans-
Ground transportation and 99% on the same dayday.
It\'s hard to beat.
Don\'t be caught off guard if you really decide to go to Aldi: more street-pop stuff: Editor\'s Picks: originally published in October. 18.
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