The Land :: www.TheLandOnline.com

Nuts & Bolts

September 17, 2013

To be largest beer seller Wal-Mart sells Coors almost at cost

NEW YORK — Wal-Mart Stores Inc. is so committed to becoming America's biggest beer retailer that it has been selling Budweiser, Coors and other brews almost at cost in at least some stores.

The markup on a 36-pack of Coors Light cans at a Los- Angeles-area store was 0.6 percent, compared with 16.2 percent for a package of Flaming Hot Cheetos, according to internal documents reviewed by Bloomberg. Companies typically don't release information about markups so the March data provide a rare glimpse of Wal-Mart's alcohol pricing strategy.

Wal-Mart's push into beer is part of a plan to double alcohol sales by 2016 and seize a larger slice of a U.S. beer market worth about $45 billion. While founder Sam Walton frowned on drinking to excess, selling cheap suds is a way to lure shoppers who typically buy other products at the same time. Repeat visits are crucial for the world's largest retailer, which last month cut its profit forecast and reported second- quarter profit and sales that missed analysts' estimates.

"We continue to look for opportunities to invest in price," Wal-Mart U.S. chief Bill Simon said at a Goldman Sachs conference last week. "A great example for us is adult beverages. We have been continuing to move prices lower on that and seeing returns in the form of market-share gains in that category."

While the markup on beer at the Los Angeles-area store was less than 1 percent, Wal-Mart sold Coca-Cola 20-ounce bottles for 29.9 percent above cost, according to the data. Cereals such as Quaker Quick Oats and Honey Nut Cheerios were marked up 32.5 percent and 16.6 percent, respectively.

Deisha Barnett, a Wal-Mart spokeswoman, said pricing is determined market by market and declined to say whether the markups were nationally representative.

"This is nothing new that we're investing in price in adult beverage," she said in a telephone interview. "Grocers have long invested in this to drive traffic."

Wal-Mart's gross margin, the percentage of sales left after the cost of goods sold, was 24.7 percent for the quarter ending July 31. Target's gross margin in the quarter ended Aug. 3 was 31.4 percent.

A year ago, Chief Merchandising Officer Duncan MacNaughton told 500 alcohol industry representatives attending an "adult beverage summit" at Wal-Mart's Bentonville, Ark., headquarters that the company would discount alcohol as part of its strategy to gain share in the category. Wal-Mart has since discounted a range of mainstream and craft beers, doubled the number of alcohol buyers to 12 and cleared more shelf space to promote alcoholic beverages.



 

1
Text Only
Nuts & Bolts
  • Hospitals let patients schedule ER visits

    Three times within a week, 34-year-old Michael Granillo went to the emergency room at Northridge Hospital Medical Center in Los Angeles because of intense back pain. Each time, Granillo, who didn't have insurance, stayed for less than an hour before leaving without being seen by a doctor.

    July 24, 2014

  • Almost half of America's obese youth don't know they're obese

    The good news is that after decades of furious growth, obesity rates finally seem to be leveling off in the U.S.. The bad news is that America's youth still appear to be dangerously unaware of the problem.

    July 24, 2014

  • An oncologist uses scorpion venom to locate cancer cells

    Olson, a pediatric oncologist and research scientist in Seattle, has developed a compound he calls Tumor Paint. When injected into a cancer patient, it seems to light up all the malignant cells so surgeons can easily locate and excise them.

    July 24, 2014

  • 130408_NT_BEA_good kids We're raising a generation of timid kids

    A week ago, a woman was charged with leaving her child in the car while she went into a store. Her 11-year-old child. This week, a woman was arrested for allowing her 9-year-old daughter to go to the park alone. Which raises just one question: America, what the heck is wrong with you?

    July 18, 2014 1 Photo

  • Your chocolate addiction is only going to get more expensive

    For nearly two years, cocoa prices have been on the rise. Finally, that's affecting the price you pay for a bar of chocolate - and there's reason to believe it's only the beginning.

    July 18, 2014

  • Afghanistan vet who ran to grenade gets Medal of Honor

    A former Marine Corps corporal who was severely wounded when he risked his life to shield a squad mate from a grenade blast in Afghanistan was awarded the nation's highest military decoration Thursday.

    June 20, 2014

  • May 2014 was the hottest may in recorded history

    According to new data released this week, May 2014 is officially the warmest May in recorded history.
    Both NASA and the Japan Meteorological Agency have tentatively ranked May at the top of historical measurements, though NASA's numbers are preliminary because crucial information is still missing from China.

    June 20, 2014

  • Nelly-elephant.jpg Bet the farm: 5 'psychic' animals predict soccer victories

    Need some guidance on whom to place your bets for this year's World Cup? Since Paul the Octopus achieved a prediction success rate of 85 percent in 2010, hosts of animal oracles around the world have sought attention as soccer sages. Here's a look at a few of them.

    June 20, 2014 1 Photo

  • Is the FDA waging a war on artisanal cheese?

    Is the Food and Drug Administration waging a war on artisanal cheese?
    The answer depends on your perspective. But this much is certain: The agency's answer to New York regulators about using wooden boards to age cheese has caused an uproar in the domestic industry and raised questions about the status of imported cheeses that use the same process.

    June 12, 2014

  • Texting while driving is latest teen risk as smoking declines

    While smoking among American teens has fallen to a 22-year low, most adolescents admit to engaging in a new type of risky behavior: texting while driving.

    June 12, 2014

Featured Ads
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
The Land's Twitter Feed