- Walmart plans to make several changes to leadership in its produce, bakery and deli departments, according to a company memo obtained by Reuters.
- The retailer will split leadership of its bakery and deli departments. Kerry Robinson, who formerly headed both sections, will now manage bakery, while Tyler Lehr will take charge of deli operations. Walmart is also reassigning Shawn Baldwin, the company’s senior vice-president and general merchandise manager for produce and global food sourcing. He will focus on a new Hispanic consumer initiative, while Martin Mundo, who has worked for Walmart in Argentina and other countries, will take over Baldwin’s position.
- Walmart is currently battling discounters Lidl and Aldi for low-price supremacy, and will continue to do so as all three retailers expand. To keep its prices down, the world’s largest retailer is conducting price tests across the country and pressuring suppliers to lower their prices.
From deep investments in e-commerce to store remodels and cost-cutting, Walmart is doing everything it can to position itself for growth in an industry that’s seeing anything but business as usual. With thousands of large-format stores chock-full of groceries and other merchandise, Walmart knows it has to work hard to win over consumers that might drift to smaller discounters and fresh-focused retailers.
One way it hopes to stay ahead is by doing what it’s always done well: keep prices low. Walmart is pressuring its suppliers, pushing for efficiency inside its own stores and warehouses, and conducting price checks nationwide to stay competitive. They’re all measures the retailer has taken in the past, but numerous reports point out that the retailer is turning up the heat even further as discounters, online competitors and others close in. By some accounts, Walmart has ignited a price war.
At the same time, Walmart knows it needs to optimize its food leadership to capitalize on industry trends. The company didn’t provide reasoning behind its recent moves in the memo obtained by Reuters, but it’s not too hard to read the tea leaves. With more than 60 million Hispanic consumers in the U.S., Walmart understandably wants to provide outreach and marketing to the high-value demographic. It’s an area that may need problem solving: Studies show Hispanic shoppers tend to build bigger baskets than other consumer groups, but some in the industry, including Target CEO Brian Cornell, say these shoppers are spending less these days.
Likewise, Walmart’s separation of its deli and bakery management seems to reflect an increased focus on these two fast-growing fresh categories. According to Progressive Grocer’s most recent Retail Bakery Review, 70% of grocers say their bakery sales increased last year over the year prior. Deli, meanwhile, continues to drive fresh growth in stores, with sales accounting for 17% of total store dollars last year.
Walmart faces a tough test from discounters Aldi and Lidl, which can match the retailer on price and, with their private-label heavy selection, are able to quickly update their merchandising mix to meet consumer demand. Walmart may also face stiff competition from what many observers predict will be a resurgent Whole Foods under Amazon.
But Walmart has numerous advantages of its own, including the industry’s lowest prices on national brands and a rapidly expanding e-commerce footprint. It seems the retailer is determined to crack the last mile problem in grocery delivery. Indeed, while fast-growing discounters, online competitors and a bailed-out Whole Foods seem promising, Walmart remains the safe bet for continued industry dominance.