Walmart’s growth problem: Assortments or pricing?

It’s debatable whether SKU rationalization was a good idea or a bad one. Walmart had a deserved reputation for carrying “too much stuff” and making its stores difficult to navigate. To lay the blame on the assortment planning process is missing the point, but to add back SKUs that can carry their weight makes sense as long as Walmart continues to focus on the store experience.

The real issue is pricing, and Walmart has lost share not because of SKU rationalization but because it has “given away” its key pricing edge to Target, Costco and others. Walmart had arguably the best sustainable competitive advantage in the history of retail, with an entire company culture and supply chain focused on low-price leadership. Refocusing on price leadership is long overdue, especially with consumers pinched more than ever by rising gas prices.

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