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How Gas Prices Hurt, then Helped Wal-Mart

Retail Detail has a nice little snippet analyzing how high gas prices--which cut into Wal-Mart's sales a year ago--have ultimately ended up giving the retailer a boost.

So I asked CEO Lee Scott where the tipping point in terms of changing consumer behavior.

His answer was an interesting one. Scott said it was undeniable that Wal-Mart's core customers were the first ones impacted by the spike in gasoline prices and they bought less. What changed? Scott said two things: (1) Wal-Mart improved its store experience (cleaned up aisles, added brands to its merchandise and refocused on retail) and (2) the economic stress spread from the bottom up and brought in new customers at "the right" time (i.e. After Wal-Mart improved stores.)

Scott said that this trend doesn't mean that business will fall off when the economy improves. Wal-Mart executives also made it clear that they're interested in expanding health care and green initiatives. In other words, they're trying to anticipate where product trends are headed and carve out a low cost niche to feed developing needs.

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