The Clinton Herald, Clinton, Iowa

Lifestyles

September 16, 2013

To be largest beer seller Wal-Mart sells Coors almost at cost

NEW YORK — Wal-Mart Stores Inc. is so committed to becoming America's biggest beer retailer that it has been selling Budweiser, Coors and other brews almost at cost in at least some stores.

The markup on a 36-pack of Coors Light cans at a Los- Angeles-area store was 0.6 percent, compared with 16.2 percent for a package of Flaming Hot Cheetos, according to internal documents reviewed by Bloomberg. Companies typically don't release information about markups so the March data provide a rare glimpse of Wal-Mart's alcohol pricing strategy.

Wal-Mart's push into beer is part of a plan to double alcohol sales by 2016 and seize a larger slice of a U.S. beer market worth about $45 billion. While founder Sam Walton frowned on drinking to excess, selling cheap suds is a way to lure shoppers who typically buy other products at the same time. Repeat visits are crucial for the world's largest retailer, which last month cut its profit forecast and reported second- quarter profit and sales that missed analysts' estimates.

"We continue to look for opportunities to invest in price," Wal-Mart U.S. chief Bill Simon said at a Goldman Sachs conference last week. "A great example for us is adult beverages. We have been continuing to move prices lower on that and seeing returns in the form of market-share gains in that category."

While the markup on beer at the Los Angeles-area store was less than 1 percent, Wal-Mart sold Coca-Cola 20-ounce bottles for 29.9 percent above cost, according to the data. Cereals such as Quaker Quick Oats and Honey Nut Cheerios were marked up 32.5 percent and 16.6 percent, respectively.

Deisha Barnett, a Wal-Mart spokeswoman, said pricing is determined market by market and declined to say whether the markups were nationally representative.

"This is nothing new that we're investing in price in adult beverage," she said in a telephone interview. "Grocers have long invested in this to drive traffic."

Wal-Mart's gross margin, the percentage of sales left after the cost of goods sold, was 24.7 percent for the quarter ending July 31. Target's gross margin in the quarter ended Aug. 3 was 31.4 percent.

A year ago, Chief Merchandising Officer Duncan MacNaughton told 500 alcohol industry representatives attending an "adult beverage summit" at Wal-Mart's Bentonville, Ark., headquarters that the company would discount alcohol as part of its strategy to gain share in the category. Wal-Mart has since discounted a range of mainstream and craft beers, doubled the number of alcohol buyers to 12 and cleared more shelf space to promote alcoholic beverages.



 

1
Text Only
Lifestyles
  • Student leadership Alumni honor students at luncheon CLINTON -- Clinton Community College student leaders were recognized at a student leader luncheon. The CCC Alumni Association honored 30 students, who were nominated by the CCC staff and faculty for showing leadership in the classroom, on campus and

    April 18, 2014 1 Photo

  • EICC to host career fair DAVENPORT-- Manufacturing jobs are available for those who look for them. Eastern Iowa Community College's Blong Technology Center is helping in that search with its upcoming Advanced Manufacturing Career Fair, from 2 to 6 p.m April 29. Several area

    April 18, 2014

  • CCC Veterans Association host 'Honor Flight' showing CLINTON -- The Clinton Community College Student Veterans Association will be host a public showing of the Honor Flight Movie at 6 p.m. Thursday, May 8. The movie will be shown at Clinton Community College Auditorium, 1000 Lincoln Blvd., Clinton. The

    April 17, 2014

  • Sound of Music Screenings showcase films at TLP MOUNT CARROLL, Ill. -- Timber Lake Playhouse will host two events next month. A sing-along "Sound of Music" event will be held at 6:30 p.m. Saturday, May 3, and at 2 p.m. Sunday, May 4, at the Mount Carroll theater. A screening of "Young Frankenstein

    April 17, 2014 1 Photo

  • April is Donate Life Month

    CLINTON -- The month of April is National Donate Life Month across the United States. Hospitals across the nation, like Mercy Medical Center in Clinton, join to recognize the impact that organ and tissue donations make and to honor the generosity of

    April 17, 2014

  • Screen shot 2014-04-11 at 4.49.09 PM.png Train, entertain your pets with these 3 smartphone apps

    While they may not have thumbs to use the phone, pets can benefit from smartphone apps designed specifically for them.

    April 13, 2014 1 Photo

  • Alternatives available for addicts DEAR ANNIE: I enjoy reading your column and agree with most of your advice, including your recommendations when it comes to handling alcohol addictions and binge drinking. I do not work in this field, but I've seen alternatives to AA that may be more

    April 12, 2014

  • Peace Soup Peace Soup completes 7th year CLINTON -- Peace Soup concluded its seventh year this week. Peace Soup was held for five Tuesdays during the Lenten season. The series for 2014, "Interfaith Connections to Peace," featured the topic of Christianity. Elizabeth Liggett, pastor at St.

    April 12, 2014 1 Photo

  • Milkweed plants Raising awareness of milkweed MAQUOKETA -- The Hurstville Interpretive Center will attempt to raise public awareness about milkweed plants. The center is holding a plant sale for area residents to try to include more milkweed plants in the region for monarch butterflies. The sale

    April 10, 2014 1 Photo

  • Women's club extends sale CLINTON -- The Clinton Women's Club has extended the deadline for the group's annual silent auction. The deadline for bids is through Saturday for the purse and bag silent auction at the George Curtis Mansion, 420 Fifth Ave. South. During this past w

    April 9, 2014

Elections
Front page
Clinton Herald Photos


Browse, buy and submit pictures with our photo site.

Poll

Should the city of Clinton appeal the open records violation ruling that will cost taxpayers $40,600?

Yes
No
     View Results
AP Video
Olympics 2014
Featured Comment
Featured Ads
Blue Zones Project
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.