Wal-Mart Explores Selling Large Appliances

Wal-Mart Stores Inc. may begin adding large appliances such as stoves and dishwashers to stores in Texas this year as part of a pilot program that could lead to a nationwide launch.

The retailer is looking at a program selling appliances from General Electric Co. and could roll out to more than 100 stores initially, according to analysts and consultants familiar with the retailer’s plans.

Last month, Wal-Mart’s U.S. chief Bill Simon, speaking at an industry conference, said the company is “looking at everything including appliances right now.” Mr. Simon didn’t provide specifics about the scope other than saying: “If it’s something that we believe there is customer demand for and an opportunity to make some money, we’re going to get into it in a big way.”

A Wal-Mart spokesperson declined to provide details. A GE spokesman didn’t respond to a request for comment.

Budd Bugatch, retail analyst at Raymond James, said shoppers in Texas might expect to see 75 or more products in the appliance display areas that Wal-Mart is expected to set up, including major appliances such as stoves, washing machines and refrigerators.

A push by Wal-Mart would have major ramifications from big appliance retailers including Sears Holdings Corp., Home Depot Inc. and Lowe’s Cos., and also the appliance companies that now supply them. Profits could be squeezed because of Wal-Mart’s size—it has roughly 3,000 Supercenters in the U.S.—and low-cost pricing approach.

Wal-Mart also faces hurdles, including how likely its low-income customer would be to make such a large purchase, and how the retailer would sell the product, which usually involves having a trained salesperson assisting customers. Wal-Mart would also likely have to make arrangements, and give up some profit, to its suppliers or an outside contractor to install the product.

This wouldn’t be the first time that Wal-Mart has sold appliances through a pilot program. Staff at a couple of stores said the company had run a small program about a decade ago. Mr. Bugatch said he encountered a lack of training when he visited an appliance department during that program. The test was also conducted at a time that Home Depot was beginning to sell major appliances, which made it more difficult for Wal-Mart.

Wal-Mart’s return to the large-appliance business would stand alongside other efforts the nation’s biggest retailer is taking to look for ways to boost domestic sales growth after seven straight drops in quarterly same-store sales.

Wal-Mart is also looking at pouring millions of dollars into smaller-scale stores to capture more urban and dollar-store business and opening even smaller outlets on campuses, as well as taking steps to reinforce its appeal by re-emphasizing acceptance of promotional coupons. The retailer is also going back to basics within its stores by returning merchandise that customers missed during an effort to give stores a crisper look.

With a focus on price leadership and assortment, and tremendous heft as a company, moving the dial isn’t easy for Wal-Mart.

“Growing their comparable-store sales by a percent takes a lot of revenue,” said Peter Brown, vice chairman at retail consulting firm Kurt Salmon. “But they have to start driving some growth, and that means exploring a wide range of initiatives.”

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