How to Fight Wal-mart? Sell Better Food!

walmartNo big surprise in the Wall Street Journal's recent article about local businesses suffering when a Wal-mart comes to town. But there's also some interesting advice for small business owners and local grocers when it comes to staying alive. For one thing, the article cautions these businesses against trying to match Wal-mart on price, suggesting that this will simply compound the problem, reducing sales by 25% rather than 17%. When I worked for Best Buy, we acknowledged that trying to beat Wal-mart on price was a losing game, so we focused on things they couldn't do as well as we could, like provide technical advice, superior service, and better selection. Kusum Ailawadi, professor of marketing at Dartmouth, suggests much the same for local grocers: increase variety, pick up the long tail, and focus on quality. Wal-mart is built for selling huge quantities of non-special things. Sell special things instead. According to the article: [Ailawadi] says that local retailers should generally move away from lower-tier products and expand their product assortment to different brands, such as natural or organic items. There you have it. Want to beat Wal-mart? Sell natural, organic, local foods. For some consumers, quality always trumps quantity, especially when it comes to our food.