Walmart's Beer Push To Double Sales By 2016

Walmart (NYSE:WMT) founder Sam Walton must be rolling over in his pallet in that assembly line in the sky. First, Walmart ended its blood feud with the NRF a few months ago—a feud that lasted 44 years—and now the chain has quietly started pushing beer, something its founder would have never approved.

There's a difference between selling a case of beer here and there and aggressively pushing beer sales, and Walmart has clearly moved into the aggressive category, according to a report from Bloomberg.

"The world's largest retailer has focused as never before on beer—a U.S. category worth about $45 billion—and has moved aggressively to grab market share. The company has doubled the number of alcohol buyers to 12 and offered discounts on a range of brands, from mainstream Coors to such craft beers as Deschutes," the story said. "It ditched slow-selling products to make way for beer and is even selling it in garden centers. New stores are designed to put the suds front and center."

Bloomberg said that some Wall Street analysts who closely track Walmart hadn't heard about the move, which Walmart wants to give a very low-profile. A longtime ban of pushing beer in its sales circulars, for example, ended this year, and the company has campaigned to end retail alcohol sales in the chain's home county of Benton.

Said Walmart spokesperson Deisha Barnett: "Focusing on adult beverages is a decision we made this year."

The story quoted Sanford C. Bernstein & Co. analyst Colin McGranahan, arguing that beer makes a lot of sense for Walmart. Beer is "a traffic-driving category. High-frequency consumables can help them with their traffic problem. Beer fits that."

That said, laws surrounding alcohol sales force Walmart to treat beer very differently than its other products, as its unable to do its usual massive quantity buy from suppliers, instead having to work with networks of third-party distributors.

For more:
- See this Bloomberg story

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