EDLP and Viva la Mexico

Even Wal-Mart executives are saying openly now that a return to their Every Day Low Pricing discount roots has helped their recent sales performance. Here is Wal-Mart's treasurer talking about the retailer's fourth quarter performance.
From a Reuters story:

"Getting back to really every day low prices and making sure we were the price leader," said Charles Holley, Wal-Mart's treasurer, speaking at a Citigroup retail conference. "That was very important to us in the fourth quarter." To try boost sales and expand beyond its core of low-income shoppers, Wal-Mart began stocking its stores with higher-priced merchandise, like organic foods and plasma televisions, hoping to appeal to wealthier shoppers. But the efforts yielded mixed results and after months of down playing its discount prices, Wal-Mart returned to its low-price strategy early in the holiday season, announcing price cuts on toys and games in October.

TK: As much as Wal-Mart would in some ways like to match Target's upper middle class appeal, the Bentonville-based retailer's identity and consumer demographic is different. Dick Spezzano told me a couple of weeks ago that some studies have show that the household income of Target shoppers is as much as $20,000 more than Wal-Mart. I have to think organic produce will be taking a lower priority for Wal-Mart in the months ahead if the chain is indeed trying to be true to its roots.

Meanwhile, Wal-Mart is going to be investing in Mexico in a very big way in the upcoming year, this story reports. Beyond the retail store growth, Wal-Mart's banking operation hope to exploit an underserved population: 80% of the country's population has no bank account.
From HispanicBusiness.com:

Eduardo Solorzano, the top executive of Wal-Mart Mexico, told a press conference that the Wal-Mart banking operation will be launched after June and that the program will have between 10 and 12 branches by the end of the year, most of them in and around the capital. Plans call for up to 60 branch offices at Wal-Mart stores throughout the nation by the end of 2008, though that degree of expansion requires approval of Mexican federal regulators, Solorzano noted. He said some 80 percent of the Mexican population of just over 100 million does not have a bank account or credit card, and that the company sees huge potential in that statistic. The executive said the 2007 plan will result in a 12-percent increase in installed capacity in Mexico, where it currently has 893 stores. He estimated the growth will provide employment to some 20,000 new hires. Wal-Mart is Mexico's top retailer, present in 139 Mexican cities and employing more than 140,000 people.

TK: Wal-Mart's continued expansion in Mexico should be positive for U.S. fresh produce suppliers who are doing business with Wal-Mart Mexico now. I can't help but think, though , that getting credit cards may be no great blessing for those millions of underserved Mexicans.