Chatter regarding another Walmart-GE appliance pilot has resumed, this time in the Wall Street Journal where “analysts and consultants familiar with the retailer’s plans” point to a 100-store test of 75 SKUs or more this year in Texas.
Neither company commented for the article, although Walmart U.S. president/CEO Bill Simon acknowledged at a conference last month that discounter is considering all category options, including appliances.
All this contradicts recent assurances by GE to buying group executives, as reported in TWICE, that the project was off the table.
A more limited white-goods trial was mounted by Walmart and GE in 2000, just weeks after Circuit City — then the No. 2 majap chain behind Sears — announced it was abandoning the category.
This time around the world’s largest retailer may carve out dedicated appliance departments on the sales floor vs. the previous front-of-the-store placement, the buying group execs reported. But Walmart would also find stiffer competition in an entrenched home improvement channel, a reformulating Best Buy, and a promotionally-driven Sears. And Sears’ own experience with selling major appliances through the discount channel, i.e., Kmart, has had mixed results.
How a move by Walmart into majaps would impact independent dealers, who tend to carry a richer mix of fully featured, high-margin models, remains to be seen. But it would almost certainly spark renewed price promotions, could derail this month’s planned vendor cost increases, and would take a heck of a lot of volume out of the channel.
Stay tuned …