Wal-Mart Reducing CE Floor Space in Remodeling

Wal-Mart is cutting floor space for CE products to make room for categories being expanded or returned to the merchandise mix as it reverses course on a product streamlining strategy launched two years ago, Rosalind Brewer, the company’s eastern division president, said Tuesday at the ISI Retail Summit in Atlanta, which was webcast.

Wal-Mart is increasingly selling smaller CE goods, so the space devoted to the category could be reduced to allow space for an expanded clothing assortment and for returning categories such as fabrics and crafts, Brewer said. Wal-Mart says it’s increasing its merchandise selection about 11 percent by adding 8,500 SKUs across all categories. Wal-Mart will remodel 10 to 12 percent of its North American stores this year in an effort that also marks a return to its everyday low pricing strategy, Brewer said. The restocking will start with dry goods including pasta and snacks and move to CE in the second half, the company has said.

CE is a “vibrant category,” but Wal-Mart sells “a lot of smaller items” and the department doesn’t need all the space it has, so it will be reduced as others are expanded, Brewer said. We couldn’t learn how much floor space will be trimmed from Wal-Mart CE departments, and a spokeswoman for the chain wasn’t available to comment. Wal-Mart’s in-store TV displays are being upgraded to better display Internet-connected models, analysts said.

The new strategy includes a new advertising campaign that debuts this month to underscore the chain’s “everyday low prices.” The overall effort is in sharp contrast to Project Impact, launched in 2009 to trim product selection. Wal-Mart has struggled since. U.S. sales declined seven consecutive quarters.

Wal-Mart’s revived everyday low pricing will be promoted by in-store signs starting in May, Brewer said. The retailer also is preparing an “ad-matching” program allowing store check-out staff to match or beat competitors’ prices at the cash registers, she said.

Meanwhile, Wal-Mart’s Vudu launched a video streaming service this week, making its library of 20,000 movies and TV shows available to PCs without a software download. Vudu was previously accessible only through branded Internet-connected TVs and Blu-ray players. HD movies are available at $2 for two nights, and there are daily 99-cent specials. Wal-Mart acquired Vudu last year.