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Yeah, success breeds contempt. Just ask Wal-Mart (NYSE: WMT ) , whose business achievements are spawning a cottage industry of money-for-hire anti-Wal-Mart activists. Grocers are increasingly focused on defending their turf as the retail titan looks for every avenue to increase sales. Last year 51% of Wal-Mart's sales came from its food aisles.
In their quest to stymie Wal-Mart's store expansion, grocers such as Supervalu (NYSE: SVU ) and Safeway (NYSE: SWY ) have turned to Saint Consulting Group to secretly run their anti-development campaigns. Saint uses political-campaign-style methods to achieve its objectives: petitions drives, websites, and phone calls. One of Saint's most recent assignments was to block Wal-Mart from competing with some of Supervalu's retail outlets in Mundelein, Illinois, just outside Chicago.
According to the Wall Street Journal:
As Wal-Mart Stores Inc. has grown into the largest grocery seller in the U.S., similar battles have played out in hundreds of towns like Mundelein. Local activists and union groups have been the public face of much of the resistance. But in scores of cases, large supermarket chains including Supervalu Inc., Safeway Inc. and Ahold NV have retained Saint Consulting to block Wal-Mart.
Saint has called his staff the "Wal-Mart killers."
Wal-Mart has had a tough year growing sales, while other retailers fared better, but it looks like the rivalry among grocers could really heat up. Groceries appear to be the promised land for discount retailers looking for expansion, since food is a necessity and draws traffic to a store. Target (NYSE: TGT ) is making a move into food, and deep discount chains such as Dollar General (NYSE: DG ) have as well.
Is Wal-Mart a victim of its own success as a grocer? And does it deserve what it's getting? Let us know in the comments below.