Big Box Phenomenon
The emergence of Wal-Mart as a big box retailer has changed retail in the United States, according to a 2008 article on Wal-Mart and competition in AllBusiness.com. Big box retailers typically have stores exceeding 50,000 square feet. This type of store is standard, with large windowless single-story buildings. Several other big box retailers like Toys "R" Us, Best Buy, Target, Lowe's and Home Depot have created competition for Wal-Mart. However, Wal-Mart has stood out as the perennial merchandise big box retailer, according to the AllBusiness.com article. Because of its big box status, Wal-Mart has exceeded small retailers in profits. Annual revenues for 2004 were slightly over $288 billion. Revenues in 2006 exceeded $350 billion. Wal-Mart maintains its status as a big box retailer by seeking profits through a high volume of low-price items. Low-Cost Leadership
Wal-Mart's slogan is "Spend Less. Live Better." The giant retailer prides itself on providing customers with low-cost items that beat competitors. Wal-Mart reported a 3.6 percent increase in net income from cost cutting, according to an August 2010 Associated Press article. Customers are cautious about spending because of a slow economy, and Wal-Mart continues to be their low-cost option. Customers choose to shop at Super Wal-Mart centers for groceries, rather than the local grocery store because of discounted items. For example, Wal-Mart offers $1 ketchup bottles and $4 for a case of soda. The Associated Press article stated that Wal-Mart benefited during the recession as affluent shoppers were forced to downgrade to cheaper options.
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