Walmart Suffering Biggest-Ever Slump

Execs admit retail giant lost its way
By Rob Quinn,  Newser Staff
Posted Feb 22, 2011 2:55 AM CST
Updated Feb 22, 2011 6:47 AM CST
Wal-Mart Suffering Biggest-Ever Slump
An employee directs a customer inside a Wal-Mart store in Alexandria, Va.    (AP Photo)

Walmart is suffering its worst-ever slump in US sales and is widely expected to post more disappointing figures when it reports earnings today. Analysts say the retail giant's woes are the result of its failure to follow founder Sam Walton's formula of providing ordinary Americans with "every day low prices." Instead, the chain—facing stiff competition from rivals like Target—chose to offer "rollback" discounts on some products while hiking the price of others.

"The whole rollback thing spread like a cancer, and it is systemic," a former Walmart exec tells the Wall Street Journal. "Now Target doesn't have to lower prices, because we have raised ours. I think we have alienated a lot of blue-collar shoppers." After attempts to lure higher-income customers failed, execs admitted there had been missteps and set out to win back core customers, although analysts believe it could be years before it bounces back. (Read more Walmart stories.)

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