Wednesday, October 2, 2013

Contradiction? Walmart aims to double beer sales, yet could stop selling tobacco due to "health issues"


Sure, you read that correctly.  Here are details from my report today (see full story) on the retail giant. 

A Walmart executive told the National Beer Wholesalers Association meeting in Las Vegas that the world's largest retailer plans to double beer sales over the next three years. According to an AdAge recap of the Oct. 2 meeting, the chain is already the largest beer seller in the United States after tripling its alcohol sales over the past decade. The aggressive sales goal comes despite the company's ongoing debate over whether to carry tobacco anymore because of its health risks.

The retailer's Chief Merchandising and Marketing Officer Duncan Mac Naughton, during a presentation at the meeting, said of the beer sales goal, “"I see it as a layup. My team sees it as a big half-court shot. But I'm telling you, it's there.” The comment was interrupted by applause from the crowd of nearly 4,000 beer distributors and suppliers.

The stores already include beer in its circulars and has more prominent displays in stores. New strategies include adding more refrigeration and storage space for beer and slashing prices to nearly at-cost in states without minimum pricing.

In contrast, the retailer's vice chairman, Eduardo Castro-Wright, acknowledged after the recession that the retailer has become sensitive about its public image. He told AdWeek the world's largest retailer has considered -- and would continue to consider -- eliminating tobacco products from its stores and noted how selling tobacco conflicts with Walmart's increased emphasis on health.

In March, Canada’s Centre for Addiction and Mental Health (CAMH) reported alcohol is now the third out of 67 leading causes of disease and injury worldwide. (See full story) Alcohol was responsible for 5.5 percent of all disease and illness, behind only high blood pressure and tobacco use.

Among the findings: Americans drink more than 50 percent above the global average, and show a more detrimental drinking pattern than most of the 27 European Union (EU) countries, with more bingeing. “Alcohol consumption has been found to cause more than 200 different diseases and injuries,” said Kevin Shield, lead author of the study. “These include not only well-known outcomes of drinking such as liver cirrhosis or traffic accidents or the disease of alcoholism, but also several types of cancer, such as female breast cancer.” (See yesterday's blog)

However, Castro-Wright also emphasized that at Walmart, "first and foremost, we service customers, which means selling them what they want to buy.”

The giant retailer in August lowered its earnings estimate after a surprise decline in second-quarter same-store sales.