May 3, 2005

Beating Wal-Mart

Both Businessweek (ht: BP) and Business 2.0 ($)have recently focused on how to beat Wal-Mart.

The skinny: YOU CAN'T BEAT WAL-MART BY BEING A WAL-MART CLONE:

From the former:

Jungle Jim's might well be America's wackiest supermarket, but there is method to Bonaminio's madness. Instead of trying to beat the big chains at their price-squeezing game, Bonaminio has built a funhouse maze of a store north of Cincinnati that draws 50,000 shoppers a week from as far away as Indianapolis and Lexington, Ky. "The Jungle" is not all fun and frivolity; its other defining trait is a huge selection of specialty foods from 75 countries. Sales totaled $63.5 million in 2004, up from $29.8 million in 1995 -- not bad for a college dropout who got his start in 1971 selling produce from a roadside stand. (Bonaminio says he turns a profit, but he won't disclose numbers.)

From the latter:

COSTCO is whipping Wal-Mart by targeting different customers: people who have cash and want cachet on the cheap.

VITAL SIGN: Costco sales per store, 2004: $115 million. Sam's Club: $67 million.
...

DOLLAR TREE attacks Wal-Mart's strength with simple pricing and a less painful shopping experience.

VITAL SIGN: Dollar Tree operating margin, 2004: 9.7 percent. Wal-Mart: 5.9 percent....

SAVE-A-LOT grocery stores bring back the bygone Main Street feel and focus on underserved neighborhoods.

VITAL SIGN: Save-a-Lot profit margin, 2004: 3.5 percent. Wal-Mart (groceries only): 2.6 percent....

DICK'S SPORTING GOODS has created a sales team with true expertise that coddles customers.

VITAL SIGN: Dick's revenue growth, 2004: 34 percent. Wal-Mart (sporting goods only): 16 percent.

Granted, it's easy to pick and choose statistics to make one side look better than it is...

Posted by Kevin on May, 3 2005 at 03:37 PM