The bank fee debacle recently outraged American consumers and led large banks like Bank of America
Wal-Mart's Money Centers have been adding customers for years, appealing to lower income folks who may lack bank accounts, and individuals who are sick of traditional banks' ever-expanding, relentless litany of fees.
The Credit Union National Association says the debit card fee fiasco has resulted in 650,000 people switching to credit unions in just more than a month's time. Wal-Mart has experienced an upswing in financial customers in the wake of the outcry, too, and says it's gaining market share.
Although Wal-Mart never followed through with a previous plan to get a federal bank charter, it currently offers affordable check cashing, options for bill payments and wiring money overseas, and pre-paid debit cards.
Ironically, as sharp as anti-bank sentiment is now, Wal-Mart's been subject to plenty of negative sentiment of its own over the years, based on claims that span from driving mom-and-pop shops out of business to the ugly treatment of its workers. Maybe right now management's hoping that angry Americans are more focused on occupying Wall Street than blocking Wal-Mart stores' entry into coveted markets.
Wal-Mart's eyeing another unorthodox avenue: cheap health-care services. The company has filed a "Request for Information" to seek partners to form "a low-cost primary health care platform." Wal-Mart already has 140 independent in-store clinics, and could expand its offerings for common or chronic conditions like diabetes, obesity, arthritis, high cholesterol, and HIV. (By comparison, CVS Caremark
Wal-Mart responded to the excitement around the news by downplaying its plans, and even called its own documentation "overwritten and incorrect," although it admitted that the document's the real deal. "We are not building a national, integrated, low-cost primary care platform," a Wal-Mart official said.
Ironically, last month Wal-Mart reduced its health care benefits to its own employees, citing rising costs; next year, part-time Wal-Mart workers with fewer than 24 hours a week on their time sheets will no longer have coverage. It's also hiking workers' premiums and requiring smokers to cough up extra cash for their health benefits.
Seeking American sales
Clearly, Wal-Mart's checking out various services it can offer its lower income customers. Its usual rock-bottom prices on laundry detergent, socks, sodas, and chips just haven't been turning the tides. Wal-Mart has admitted in the last year that its core customers, who often live paycheck to paycheck, are even "running out of money."
The giant retailer's unusual plans could be viewed as common sense or ominous, depending on how you view Wal-Mart, which is no stranger to controversy. Beyond the sheer number of Wal-Mart detractors, though, is one real competitive advantage: Wal-Mart excels at driving prices down.
Wal-Mart investors could view stretching the business beyond its traditional retail core as desperate, or a logical way to ring up significant extra growth that's been lacking. Regardless, these are lofty goals that could backfire; whether banking can heat up the registers and health care can serve a real shot in the arm remain to be seen. Personally, I wouldn't bank on it.
I'm not the only one who isn't banking on these changes for Wal-Mart's future. Some analysts here at The Motley Fool have taken a glimpse into the future, and their predictions are gray. If you want to see for yourself, I invite you to read their special free report: The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail. You can CLICK HERE to access it. Fool on!