Walmart Pricing strategy

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WALMART PRICING STRATEGY
"Everyday Low Prices"
It was back in 1962 that Samuel Moore Walton set up his first discount store in Arkansas, US. The specialty of the store was that it offered a wide variety of products at low prices. Thereafter Walton started setting up new stores in small towns with the thinking that there was no other retail store to cater to their needs. Large retailers like Sears, Kmart, Target, etc. concentrated on big cities. In his attempt to attract locals to his stores, Walton started the concept of everyday low prices (ELDP). Walmart advertised its pricing strategy as-
"Because you work hard for every dollar, you deserve the lowest price we can offer every time you make a purchase. You deserve our Every Day Low Price" ("Wal-Marts cost leadership...", n.d).
The everyday low price strategy requires Walmart to sell products at lowest price possible, provide services without any frills, achieve economies of scale and appeal to mass customers. Walmart sells products at a price that is less than prices offered by close competitors. While there is a wide range of products to choose from, no additional benefits or services are provided.
Strategies that support Pricing
• Low Cost Leadership
The strategy of low cost leadership gives Walmart edge over competitors. Walmart keeps the cost of operations low to produce and sell products of competitive or better quality at lower costs than other retailers. The low cost strategy worked for the retailer. It increased market share by decreasing cost of operation lower than rivals.
• Economies of Scale
Walmart has long term contracts which enable it purchase materials in bulk from vendors. It gives an advantage of ...