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Pundit’s Mailbag — Wal-Mart’s Empty Case And TV Commercial. Were We Being Unfair?

Our piece — A Wal-Mart Example — What Is The Produce industry To Do When Its Showroom Isn’t Executing Well? — brought this rebuttal from one industry member:

It is unfortunate you chose to publicize this one example which may or may not be representative across a significant number of Walmart locations.

It is especially unfortunate that there was no attempt to present a balanced review, especially if the subject was promoting / increasing the use of produce.

If a more comprehensive picture of what Walmart is doing here had been provided, you would have undoubtedly included mention of their wonderful TV ads that take their produce departments out in the public where they can be sampled and then informed this is all from Walmart.

Good for Walmart, of course, but also for encouraging purchase of more produce.

— Ron Cramer
Senior Global Ornamentals Adviser
Sakata Ornamentals
Morgan Hill, California

We appreciate the input but also think we were pretty clear.

We ran an anecdote, not the results of a national study. We clearly said that this was an “extreme example,” and we were not making a claim that this was a typical Wal-Mart display. Nor were we saying that nothing Wal-Mart does is good. We have written over 1,000 pages about Wal-Mart, much of which you can find here, and the underlying motif has been that whatever things Wal-Mart might do poorly, it has done a great favor for the world and delivered a great blessing to those living close to the waterline by offering economical prices.

In all probability, those low prices have driven consumption substantially higher than would have been the case had a low-priced option not existed.

An extreme example of wasting space and making a bad impression on consumers: A secondary banana display at the front entrance of Walmart Supercenter #2547 in Monticello, NY, on a busy summer Sunday.

Indeed, although we were writing about the subject from the perspective of Wal-Mart and retailers, in general, as a showroom for the produce industry, another critique of that empty display case is that Wal-Mart was losing money by allowing dead space in its stores. Put another way, if that display were properly stocked, volume would increase and Wal-Mart could afford to offer even lower prices. So proper merchandising is part of a virtuous circle in which increased per-square-foot sales allow fixed costs to be spread over higher volume, and thus allow lower prices without any diminution in profits.

Following that piece, we had several phone calls from friends who work at Wal-Mart today and some who have retired from Wal-Mart. They all had different perspectives but none, not one, e-mailed or called to say that “this is inconceivable” or “I’m shocked.” In fact, it is well known both internally at Wal-Mart and in the industry that Wal-Mart’s Achille’s Heel is irregular retail execution.

Which brings us to Wal-Mart’s TV commercials. They are very attractive, and the gist of them is that Wal-Mart does a  “Fresh-Over,” in which it takes various venues such as a local fruit stand, replaces the produce with Wal-Mart produce, and everyone shown can’t believe this great produce comes from Wal-Mart. Take a look at two examples here:

Of course, as we just wrote above, the problem at Wal-Mart is irregular retail execution, not low quality procurement, and the produce in these commercials was not randomly selected off the shelf of local Walmarts. So it is perfectly possible that this produce in the commercials could be terrific and the typical produce experience at Walmart could be disappointing.

One blogger put it this way:

Father’s day I decided to make a fruit salad after seeing the new commercial for its fruits. Have you seen it yet? They replace the fruit and vegetables in a fruit stand with produce from Walmart. Then they have customers rave over the samples they provide. Everyone acts so surprised that the fruit is from Walmart.

I bought strawberries and blueberries the day before Father’s Day at Walmart to add to my fruit salad based on this commercial. Over half the strawberries were mushy and rotten, and about a fourth of the blueberries had to be discarded as well.

Nothing has changed at the Trion Walmart. Same rotten fruit as always on the store shelves as before the commercial plug and freshness campaign.

A few months before the Walmart new freshness campaign started, I went to the store for cherry tomatoes. After adding them to my buggy, an employee in produce came up to my buggy and told me to check them. He turned them over and you could see from the bottom they were rotten. He then checked at least 10 more packages before he handed one back to me that he thought was Okay. The rotten tomatoes were left on the shelf by the employee.

If Walmart wants to do another fruit commercial, I could be in it for them. I wouldn’t have to act surprised if the fruit was juicy, sweet, and fresh. It would be genuine.

For the produce industry, this is all very frustrating. It seems as if every time the spouse of some big mucky-muck at Wal-Mart complains about the quality at the store, the top executive must call someone in perishables or produce and, since those people have no power over store-level execution, they announce a new toughening of procurement specs, which have nothing to do with the problem.

The plural of anecdote is not data, and even many examples don’t substitute for a national study. But the fact that such a display can exist at the front entrance to a store for over two hours tells us that, at very least,  there is a management systems problem in achieving and maintaining optimal retail execution. That impoverishes the consumer experience, makes Wal-Mart less profitable than it could be and deprives produce producers of the opportunity to make a great first impression.

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