Wednesday, March 22, 2006


PLANO, Texas (AP) -- Wal-Mart Stores Inc. has overcome its rural roots and downscale image to attract affluent shoppers, but executives admit that many of those well-heeled consumers come only for cheap groceries and steer clear of the other merchandise. In its boldest effort yet to target upscale shoppers, the nation's largest retailer is opening a new store this week with an expanded selection of high-end electronics, more fine jewelry, hundreds of types of wine ranging up to $500 a bottle, and even a sushi bar.
Wal-Mart says it won't duplicate this format anywhere else. But if plasma TVs, microbrewery beer and fancy balsamic vinegar sell in Plano, those items could be added to stores in other affluent communities.
Retail experts say nearly half of American families shop at Wal-Mart at least once a week. They say the retail giant has nearly tapped out its middle-class base and must attract consumers who love Target and Costco but not Wal-Mart. With about 3,700 U.S. stores, Wal-Mart has nearly saturated the market, and analysts say future growth depends on boosting sales by offering a better shopping experience. The company is renovating 1,800 stores as many of its older outlets have started looking a little tired. Wal-Mart profits keep rising, but not as fast as Wall Street expects, and same-store sales, those at locations open at least a year, rose faster in 2005 at smaller but trendier Target Corp. Wal-Mart stock has slipped about 20 percent in the past two years while Target shares gained about the same percentage. Wal-Mart shares rose 35 cents Tuesday, to $48.11, in a 52-week range of $42.31 to $51.46. Analysts say that despite low prices, Wal-Mart suffers from a perception that its merchandise is lower quality, which turns off consumers who can afford better.

Way to Go!