Wal-Mart, the world's largest retailer, could double in size within five years if it increases its market share in major categories such as food and apparel and newer areas such as gasoline. That's the prediction from Ira Kalish, chief economist for Retail Forward, a global management consulting and market research firm.
In a report entitled “The Age of Wal-Mart,” Kalish explores five likely growth strategies Wal-Mart may pursue.
Food. Wal-Mart's growth the past decade was largely due to the food market. Retail Forward predicts there will be more than 2,000 Wal-Mart Supercenters in the U.S. by 2006. What's more, food sales at the Supercenters will account for one-third of the national increase in spending on food.
Foreign markets. Kalish says it's unlikely Wal-Mart's overseas expansion will move swiftly enough to fuel the company's growth engine. The company's most probable courses of action will be to grow existing businesses in the U.S., extending customer reach, and to move into other businesses in the U.S. with the same velocity it moved into food.
Fashion and family. To capitalize more on existing stores and attract a more affluent consumer, Wal-Mart must ramp up efforts in apparel and home goods.
“Wal-Mart will need to focus on expanding its range of merchandise, improving the quality and variety of its non-food assortment, and developing strong private and exclusive labels,” Kalish says.
Format. For greater market and consumer reach, Wal-Mart will use multi-channel delivery. This could include opening smaller food stores, developing formats for urban shoppers and leveraging its strengths by developing drug, dollar and convenience stores.
Fringe. Wal-Mart will move beyond its current core businesses, Kalish says, by developing sales in highly new and unusual categories. An aggressive rollout of fueling stations might be followed by used car sales, providing financial services, moving into home improvement area, and even foodservice.
“The Age of Wal-Mart” special report can be purchased at www.retail forward.com.