Wal-Mart Still Retail's Greatest Market Challenge

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Wal-Mart Still Retail's Greatest Market Challenge

05/09/2005
CHICAGO -- Wal-Mart continues to be seen by other retailers as their primary market challenge in the next decade, according to a study conducted by Capgemini U.S. LLC, a global consultant on technology and outsourcing, at the Food Marketing Institute convention.

According to a survey of more than 10,000 participants that attended the FMI show, even though many retailers face such challenges as industry consolidation (19 percent), sector blurring (18 percent) and the Internet (17 percent), more than 40 percent of respondents said they believe that Wal-Mart be a formidable opponent to their businesses in the next decade, reports Progressive Grocer, a sister publication of Convenience Store News.

To counter this threat, retailers said they plan to drive profits by penetrating new markets (39 percent), lowering operating costs (18 percent), investing in new technology (17 percent) and improving customer service (16 percent).

The survey confirmed that almost half of retailers are seeing their SG&A costs continuing to increase.

"The survey demonstrates that many retail companies are focused on beating the retail giants, yet they are unclear on how to best counteract the threat," said Tom Compernolle, Capgemini consumer products and retail practice leader, North America. "Though penetrating new markets is very important, companies should also focus on streamlining their supply chains and investing in new technologies that will eliminate inefficiencies and waste."