Walmart observations

Predicting the demise of Sears & Kmart since 2017!
Bagels
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Re: Walmart observations

Post by Bagels »

Historically, Walmart begins marking apparel down at the end of the season, and continues to mark it down for several months until it reaches $1 or less. It’s mostly unpopular styles and sizes that reach that price point. For example, a local store has plenty of 6-packs of George-branded men’s briefs for $1, but only in size 3X. Alternatively, often you can find apparel that has been marked down further but whose price tag doesn’t reflect the reduction, hence its availability.

What’s different this year is the volume of apparel marked down to $1 — all winter clothing that never sold (spring/summer mark downs are more modest). While at first attributed to supply chain disruptions and labor shortages, Walmart finally acknowledged the real truth — cash-strapped consumers are buying far less general merchandise. VF Corporation recently acknowledged the same thing - consumers have become much more selective on what clothing their buying.

The end result is that retailers are sitting on a record amount of inventory that will likely be aggressively marked down…
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Re: Walmart observations

Post by storewanderer »

Bagels wrote: July 31st, 2022, 1:21 am Historically, Walmart begins marking apparel down at the end of the season, and continues to mark it down for several months until it reaches $1 or less. It’s mostly unpopular styles and sizes that reach that price point. For example, a local store has plenty of 6-packs of George-branded men’s briefs for $1, but only in size 3X. Alternatively, often you can find apparel that has been marked down further but whose price tag doesn’t reflect the reduction, hence its availability.

What’s different this year is the volume of apparel marked down to $1 — all winter clothing that never sold (spring/summer mark downs are more modest). While at first attributed to supply chain disruptions and labor shortages, Walmart finally acknowledged the real truth — cash-strapped consumers are buying far less general merchandise. VF Corporation recently acknowledged the same thing - consumers have become much more selective on what clothing their buying.

The end result is that retailers are sitting on a record amount of inventory that will likely be aggressively marked down…
Some stores in my area are even marking new merchandise down to $1 lately. Wal Mart's tags have the general season/year on them (0000, 0421, 0222, etc.), the 0000 are basic forever and some will be for instance 0022 and that means basic but for 2022. This is happening in an assortment of sizes. They manually mark stuff down (this isn't a grocery markdown sticker, it scans under the standard UPC, but they have to manually do the markdown to each UPC code, a very labor intensive process). I check on Brickseek for other store locations and see all kinds of one off markdowns like that in the past three months where a given softlines SKU will be full price at every other store in the area but one messy store will mark it down to 1.00. What I find most humorous is a lot of this merchandise, especially in summer shoes, was stuff Wal Mart actually price increased back in May when it came in, and they had to go physically tear off all the price tags and then put new price stickers on the items (19.98 items to 22.98, etc.) and now this stuff is 1.00 at multiple stores in my area in a great assortment of sizes super heavy quantity for women, also some stores have a ton for kids as well, not as much for mens.

And I won't even go into all the stuff that went to .03 over in their HBA area, but it was primarily junk I wasn't interested in, a lot of cardboard sidecap shippers of odd branded cosmetics, but various items that started above $10 moved to .03 at various locations last week.

I have noticed a lot less markdown activity like this in CA Wal Mart locations. To do these manual markdowns like I describe the store takes a profit hit and it seems like in CA it is a no-no to do this. I think they are either moving so much more merchandise in CA that they don't feel the need, or other costs are higher so they cannot afford to mark down in this nature in CA.
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Re: Walmart observations

Post by Bagels »

storewanderer wrote: July 31st, 2022, 3:08 am
Bagels wrote: July 31st, 2022, 1:21 am Historically, Walmart begins marking apparel down at the end of the season, and continues to mark it down for several months until it reaches $1 or less. It’s mostly unpopular styles and sizes that reach that price point. For example, a local store has plenty of 6-packs of George-branded men’s briefs for $1, but only in size 3X. Alternatively, often you can find apparel that has been marked down further but whose price tag doesn’t reflect the reduction, hence its availability.

What’s different this year is the volume of apparel marked down to $1 — all winter clothing that never sold (spring/summer mark downs are more modest). While at first attributed to supply chain disruptions and labor shortages, Walmart finally acknowledged the real truth — cash-strapped consumers are buying far less general merchandise. VF Corporation recently acknowledged the same thing - consumers have become much more selective on what clothing their buying.

The end result is that retailers are sitting on a record amount of inventory that will likely be aggressively marked down…
Some stores in my area are even marking new merchandise down to $1 lately. Wal Mart's tags have the general season/year on them (0000, 0421, 0222, etc.), the 0000 are basic forever and some will be for instance 0022 and that means basic but for 2022. This is happening in an assortment of sizes. They manually mark stuff down (this isn't a grocery markdown sticker, it scans under the standard UPC, but they have to manually do the markdown to each UPC code, a very labor intensive process). I check on Brickseek for other store locations and see all kinds of one off markdowns like that in the past three months where a given softlines SKU will be full price at every other store in the area but one messy store will mark it down to 1.00. What I find most humorous is a lot of this merchandise, especially in summer shoes, was stuff Wal Mart actually price increased back in May when it came in, and they had to go physically tear off all the price tags and then put new price stickers on the items (19.98 items to 22.98, etc.) and now this stuff is 1.00 at multiple stores in my area in a great assortment of sizes super heavy quantity for women, also some stores have a ton for kids as well, not as much for mens.

And I won't even go into all the stuff that went to .03 over in their HBA area, but it was primarily junk I wasn't interested in, a lot of cardboard sidecap shippers of odd branded cosmetics, but various items that started above $10 moved to .03 at various locations last week.

I have noticed a lot less markdown activity like this in CA Wal Mart locations. To do these manual markdowns like I describe the store takes a profit hit and it seems like in CA it is a no-no to do this. I think they are either moving so much more merchandise in CA that they don't feel the need, or other costs are higher so they cannot afford to mark down in this nature in CA.
Interesting. I visited three stores recently (Anaheim, Irvine & Foothill Ranch), and all three had dedicated $1 clearance racks in men/women's/boys/girls, but it was all dated merchandise (mostly last fall & winter). The men's was almost entirely XS and big & tall sizes (much of which was probably bought online and returned in-store). Markdowns on the spring/summer merchandise were much more modest -- a lot of it was marked down to what the stuff sold for prior to the big price hikes earlier this year.

Interestingly, the US Polo Assn brand was completely gone from two stores, and thinned out at Foothill Ranch. They've one of the few retailers that's been aggressively opening their own stores in recent years, and Walmart was undercutting their own store pricing. I'm thinking the Walmart partnership was a plug to move inventory that had been procured but deemed excess due to the pandemic closings and permanent store closings within Sears & JCP. Much of Sears and JCP's house brands were simply rebranded US Polo Assn stuff (It was pretty obvious... US Polo Assn put stickers on t-shirts that said "stretchy," "fitted," etc. and these same stickers appeared on Roebuck & Co., Arizona Jeans Co., etc. items). With Sears all but dead and JCP carrying very little US Polo Assn (I'll bet the majority of their product will be ABG going forward) these days, I thought Walmart would be a prominent partner but that's not the case it looks like.
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Re: Walmart observations

Post by storewanderer »

Bagels wrote: August 2nd, 2022, 12:13 pm

Interesting. I visited three stores recently (Anaheim, Irvine & Foothill Ranch), and all three had dedicated $1 clearance racks in men/women's/boys/girls, but it was all dated merchandise (mostly last fall & winter). The men's was almost entirely XS and big & tall sizes (much of which was probably bought online and returned in-store). Markdowns on the spring/summer merchandise were much more modest -- a lot of it was marked down to what the stuff sold for prior to the big price hikes earlier this year.

Interestingly, the US Polo Assn brand was completely gone from two stores, and thinned out at Foothill Ranch. They've one of the few retailers that's been aggressively opening their own stores in recent years, and Walmart was undercutting their own store pricing. I'm thinking the Walmart partnership was a plug to move inventory that had been procured but deemed excess due to the pandemic closings and permanent store closings within Sears & JCP. Much of Sears and JCP's house brands were simply rebranded US Polo Assn stuff (It was pretty obvious... US Polo Assn put stickers on t-shirts that said "stretchy," "fitted," etc. and these same stickers appeared on Roebuck & Co., Arizona Jeans Co., etc. items). With Sears all but dead and JCP carrying very little US Polo Assn (I'll bet the majority of their product will be ABG going forward) these days, I thought Walmart would be a prominent partner but that's not the case it looks like.
Single $1 racks in each department? Here we get racks and racks- you just have to be there at the right time, in the right store... it is pretty quiet again the past few days. I've never seen any $1 clothing at a CA Wal Mart. The NorCal Stores particularly seem very very slow to do any markdowns beyond whatever the corporate system feeds them. Many of these $1 items I am referring to are manually marked down by the store (not in the system). Once in a while I do see items that have the $1 price at every store when I check Brickseek so that $1 obviously comes down through the corporate feed.

One store decided it was time to clear out summer/garden for some reason over the weekend. Basically 80% off patio/bbq. A lot of garden tools were marked down to $1 (trimmers, etc.), stuff that is normally in the $10-$20 range. I was checking Brickseek to see if any other area locations had marked this stuff down yet but they had not.

I think the higher cost clothing like US Polo Association is a flop for Wal Mart. The Justice line is also looking like a big flop. I think Swiss Tech may do okay but there is so much left and the end of winter I suspect they give away all of the profits previously made with the markdowns they take. The margins are not as high on branded items, the price points are too high for Wal Mart, Wal Mart does not display/handle this type of brand properly, and the markdown of this stuff to $1 is a way bigger loss than they have marking private label clothing to $1.
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Re: Walmart observations

Post by Bagels »

storewanderer wrote: August 2nd, 2022, 9:54 pm
Bagels wrote: August 2nd, 2022, 12:13 pm

Interesting. I visited three stores recently (Anaheim, Irvine & Foothill Ranch), and all three had dedicated $1 clearance racks in men/women's/boys/girls, but it was all dated merchandise (mostly last fall & winter). The men's was almost entirely XS and big & tall sizes (much of which was probably bought online and returned in-store). Markdowns on the spring/summer merchandise were much more modest -- a lot of it was marked down to what the stuff sold for prior to the big price hikes earlier this year.

Interestingly, the US Polo Assn brand was completely gone from two stores, and thinned out at Foothill Ranch. They've one of the few retailers that's been aggressively opening their own stores in recent years, and Walmart was undercutting their own store pricing. I'm thinking the Walmart partnership was a plug to move inventory that had been procured but deemed excess due to the pandemic closings and permanent store closings within Sears & JCP. Much of Sears and JCP's house brands were simply rebranded US Polo Assn stuff (It was pretty obvious... US Polo Assn put stickers on t-shirts that said "stretchy," "fitted," etc. and these same stickers appeared on Roebuck & Co., Arizona Jeans Co., etc. items). With Sears all but dead and JCP carrying very little US Polo Assn (I'll bet the majority of their product will be ABG going forward) these days, I thought Walmart would be a prominent partner but that's not the case it looks like.
Single $1 racks in each department? Here we get racks and racks- you just have to be there at the right time, in the right store... it is pretty quiet again the past few days. I've never seen any $1 clothing at a CA Wal Mart. The NorCal Stores particularly seem very very slow to do any markdowns beyond whatever the corporate system feeds them. Many of these $1 items I am referring to are manually marked down by the store (not in the system). Once in a while I do see items that have the $1 price at every store when I check Brickseek so that $1 obviously comes down through the corporate feed.

One store decided it was time to clear out summer/garden for some reason over the weekend. Basically 80% off patio/bbq. A lot of garden tools were marked down to $1 (trimmers, etc.), stuff that is normally in the $10-$20 range. I was checking Brickseek to see if any other area locations had marked this stuff down yet but they had not.

I think the higher cost clothing like US Polo Association is a flop for Wal Mart. The Justice line is also looking like a big flop. I think Swiss Tech may do okay but there is so much left and the end of winter I suspect they give away all of the profits previously made with the markdowns they take. The margins are not as high on branded items, the price points are too high for Wal Mart, Wal Mart does not display/handle this type of brand properly, and the markdown of this stuff to $1 is a way bigger loss than they have marking private label clothing to $1.
There’s a lot of inventory on markdown here, but nowhere close to the prices you’re seeing. Nothing has caught my eye, and I’m somebody who always stockpiles gifts (for various occasions including Holidays) year-round.

I agree with you on the high-end clothing. But I did notice US Polo Assn claimed their revenue increased by 30% since 2019, even though they’ were in half as many combined JCP and Sears as 2019. Nor is JCP carrying as much US Polo Assn - IMO, the stores will only feature ABG labels plus Levi’s in the near future.
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Re: Walmart observations

Post by storewanderer »

Bagels wrote: August 7th, 2022, 10:13 pm

There’s a lot of inventory on markdown here, but nowhere close to the prices you’re seeing. Nothing has caught my eye, and I’m somebody who always stockpiles gifts (for various occasions including Holidays) year-round.

I agree with you on the high-end clothing. But I did notice US Polo Assn claimed their revenue increased by 30% since 2019, even though they’ were in half as many combined JCP and Sears as 2019. Nor is JCP carrying as much US Polo Assn - IMO, the stores will only feature ABG labels plus Levi’s in the near future.
The remodeling stores seem to be the best for finding these markdowns. Two currently undergoing remodel in my area.

Their markdown process is very slow. You almost have to just hang around the store for a couple hours if you see the employees are actively doing these manual markdowns, but it takes them literally about 30-45 seconds per piece of clothing they mark down just to get the handheld to take the markdown, then print a new clearance sticker out.

One location here had 2 racks of US Polo Men's Polos in assorted sizes marked down to either $2, $1, or $0.50. Pricing didn't make much sense to me. For instance, blue larges at .50, blue extra larges at 1.00, white larges at .50, white extra larges at $2. This is the store that for a while had all clothing clearance at .50. I am wondering if they lost too much money at .50 and tried to price increase the stuff previously marked down to .50 but didn't hit all of the sizes or something when they did the increase.

Also one of the remodeling stores is setting up what looks like a Target Dollar Spot at the front end. But they seem to be confused about what they are doing. They had it all stocked with pre-priced products at the $1 to $5 price point for about a week, then they decided to blow everything there out for .10 to .25, it was mostly summer themed items and school supply type items. Now that display is just filled with random grocery items like snack crackers, chips, and similar.

I don't really know what they are doing but they are definitely losing a ton of money with their out of control store level inventory situation.
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Re: Walmart observations

Post by Alpha8472 »

The San Francisco Bay Area Walmarts are having a shopping cart shortage. You get to the store and there are no shopping carts. Employees say they are being stolen. Hundreds of shopping carts are gone along with $10,000 electric shopping carts.

Who would steal these? "The unhoused?"
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Re: Walmart observations

Post by storewanderer »

Wal Mart posted excellent profits this week. Despite the excessive inventory and giant markdowns the company is still extremely solid financially. That high grocery volume (and all the price increases taken) seem to be a way to just mint money...
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Re: Walmart observations

Post by mbz321 »

storewanderer wrote: August 19th, 2022, 12:45 am Wal Mart posted excellent profits this week. Despite the excessive inventory and giant markdowns the company is still extremely solid financially. That high grocery volume (and all the price increases taken) seem to be a way to just mint money...
I've seen countless articles saying how more people in middle-upper income brackets that traditionally don't shop at Walmart are switching over--trying to stretch dollars due to inflation.
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Re: Walmart observations

Post by storewanderer »

mbz321 wrote: August 19th, 2022, 6:16 pm

I've seen countless articles saying how more people in middle-upper income brackets that traditionally don't shop at Walmart are switching over--trying to stretch dollars due to inflation.
I am seeing this. I also think some of the lower income customers are increasingly abandoning Wal Mart for places like Aldi, Dollar General, Grocery Outlet, etc. Wal Mart has taken A LOT of price increases on food. Yes they are still easily 20% lower than Kroger and 30-40% lower than Safeway on everyday prices but they just don't seem like the "deal" they once were on food. They are noticeably higher priced than WinCo and don't seem to care one bit that they are higher priced as they once did. In some cases even Trader Joe's has lower prices than Wal Mart.
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