Wal-Mart has Room to Grow in the USA

Wal-Mart is one of the most frequent destinations of Americans. In a 24-hour period, one in five, 20%, US adults have been to a Wal-Mart store, and during seven days, half of all Americans, 50%, shop at a Wal-Mart. Nearly nine in ten households says there is a Wal-Mart located convenient for them to shop.

Pundits question whether Wal-Mart has room to continue to grow within the borders of the US.  The positive answer to this question began to emerge in the early 80s when Wal-Mart opened its first superstores.

Now, about 25 years after beginning to open superstores which combine a complete general merchandise discount store and a complete supermarket under one roof, Wal-Mart commands an estimated 21% share of US retail grocery sales. 

Only two years ago, Wal-Mart began its trajectory towards becoming a formidable source of healthcare products and services. It reduced the price of hundreds of generic prescriptions to $4 and began opening walk-in health clinics in its stores. 

Wal-Mart in-store clinics deliver first line health treatment and preventive care under the supervision of nurse practitioners. In line with its offer of caring for the health of customers and employs, Wal-Mart has stopped selling tobacco products in its Canadian stores and introduced organic foods in its super stores. 

If past in prologue, Wal-Mart will continue to support its growing position in American healthcare by becoming increasingly proactive in its merchandising of health related products and services.

As it achieves commanding positions in the sale of grocery and health related products and services, Wal-Mart also moves to capture share of the growing number of dollars being spent for energy.  Beginning with construction of a prototype green store and emphasis in its stores of green products such as low energy light bulbs, Wal-Mart may now be moving to become a dominant supplier of green related products.

For a long time, Wal-Mart has been pumping gas in some of its stores. Now it is reported to be moving rapidly towards branding its own Wal-Mart gasoline. 

On the face of it, it does not make sense for Wal-Mart to invest in becoming the dominant seller of gasoline.  For one, It is unlikely that Wal-Mart’s gasoline prices can be lower than prices charged by discount gas stations that are already available to consumers. 

For another, customers who come to shop at Wal-Mart and then fill up their car with Wal-Mart gas may temper their spending in the store knowing that they are going to spend $30-$60 to fill up their car. And customers, who are coming not to shop but to fill up their car with Wal-Mart gas, are unlikely to launch a shopping trip into the store. Why then is Wal-Mart branding its gas?

Wal-Mart likely has a different end game in mind. Its convenience to over 80% of American households makes it a natural source of energy when cars shift from internal combustion engines to electric and/or hydrogen power. In Israel, gas stations are already being converted to exchange spent batteries with recharged batteries to support electric cars.

Renault and Nissan are expected to place 100,000 electrically powered vehicles on Israel’s roads in the next two to three years, followed by similar launches in Denmark and other smaller countries. No one in the US is as well positioned as the more than 4,000 Wal-Mart stores to supply the new forms of energy to motorists as automobiles evolve towards alternative forms of energy.

The business of selling fuel to power cars could develop even more quickly than Wal-Mart’s grocery business. As the value of used cars plummets and gasoline prices continue to rise, pressure to bring battery and hydrogen powered cars to the market stands to intensify. 

Automotive manufacturers in the US, working in tandem with Wal-Mart infrastructure, can trigger a major revival of the US automotive industry.  Wal-Mart is getting ready to prosper from the new age energy business as it addresses its tired gasoline pumps.

Far from not having room to grow in America, Wal-Mart is well on the way toward capturing more and more consumer expenditures as it moves beyond grocery and healthcare towards supplying of energy to America’s cars and continues to stay alert to opportunities to serve the changing need of the United State’s consumer.

Whospends.com will continue to posted information on Wal-Mart move to grow its share of consumer spending.

George Rosenbaum, co-founder of Leo J. Shapiro and Associates, is the principal investigator for the research on which this report on Wal-Mart is based.  

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