Let's face it: Wal-Mart's (NYSE:WMT) known for falling prices. That's why it's interesting to watch the discount giant continue to try to attract a more upscale clientele to its stores. The thought of a sushi bar in Wal-Mart sounds pretty darn uncharacteristic, but word has it that's one component of a new Wal-Mart store in Texas.
The store in Plano, Texas opens today, and it will feature pricey wine, high-end electronic gadgets, jewelry, an espresso bar, and yes, the aforementioned sushi bar. Forget the gun section -- it's yoga here. Anyone who likes to tinker with their cars would be barking up the wrong tree at the Plano store; it has a much smaller automotive section than your usual Wal-Mart. Although Wal-Mart's not planning on any similar stores, word has it that if certain items are hot, it will consider selling them in its stores in other upscale areas.
It's been no secret that Wal-Mart has been trying to polish its image, given Target's (NYSE:TGT) reputation as the shopping destination for trendier, higher-income folks seeking bargains, even on apparel. (Wal-Mart has tried to gain a little more style through its Metro 7 line and a marketing campaign in high-end fashion magazines). Still, I've seen some cute, fashion-forward outfits from Target; a couple days ago, I even found myself pondering whether the trendy discounter's cool-yet-reasonably-priced duds are competing with hip retailers like Urban Outfitters (NASDAQ:URBN) to some extent.
Furthermore, it's been clear for a while that a very broad demographic is crazy about Costco (NASDAQ:COST), which offers bulk bargains, but also a lot of upscale merchandise. (Not too long ago, my Foolish colleague Dayana Yochim and I found ourselves in Costco, admiring the retailer's bling in the jewelry case.) Despite the concrete floors, fluorescent lighting, and occasional sparrow flapping through the massive expanse to the ceiling, upper-income shoppers apparently find no shame in going to Costco.
It seems to me that Wal-Mart has an uphill battle when it comes to ratcheting up its cool appeal, though. This is an old company that just about everybody knows (except, apparently, for Paris Hilton, given her infamous question regarding whether it made walls). It has excelled because of, well, cheapness. While higher-income customers may grace it with their presence for some items, I'm not convinced that it will be easy to push certain Wal-Mart products, like apparel and home decorations, to that demographic. In addition, I can't help but think that a good percentage of upscale shoppers might avoid the retailer as a matter of principle.
Wal-Mart certainly needs to work on growth initiatives, as Fool contributor Stephen Simpson pointed out last quarter -- that's why it's important for it to eye China expansion and work on its controverisal image. This is proof of yet another bid to lure new customers to spend more. The new Plano store may be an experiment, but it makes it clear that Wal-Mart is aware of its challenges.
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Alyce Lomax owns shares of Urban Outfitters but holds no shares of any other company mentioned.
