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Wal-Mart's Hybrid Strategies

By Alyce Lomax – Updated Apr 5, 2017 at 10:14PM

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The discounter shows a willingness to think outside the big box.

Car salesperson needed in aisle 10.

Yep, those are the words you might hear over the intercom at your nearby Wal-Mart (NYSE: WMT) in the near future. According to a recent Bloomberg report, company CEO Lee Scott is talking with automakers about the possibility of selling hybrid cars. Although there's no current plan to do so, just having Wal-Mart consider such a move says something about its willingness to pursue fresh lines of thought.

Wal-Mart's shares have been stagnant as the company has struggled with its PR over the past few years. The bigger Wal-Mart has grown, the larger a target it has made for critics, who have maligned it for many of its hard-edged, cost-cutting ways. Many customers have come to realize that super-low prices on store shelves often mean scrimping on employee wages and benefits, or on environmental stewardship. And that opinion has made it easier for discounters such as Target (NYSE: TGT) and Costco (Nasdaq: COST) to woo customers -- especially higher-income shoppers -- away from Wal-Mart.

Maybe Wal-Mart has seen the light. The retailer is known for playing hardball with suppliers on price, but it has also shown a recent interest in environmental initiatives. Many critics have had to grudgingly agree that huge companies like Wal-Mart and McDonald's (NYSE: MCD) can bring about some notable -- and sometimes downright progressive -- changes, not only in their stores but also through their supply chains.

Wal-Mart's interest in environmentally friendly initiatives has made headlines, and the Bloomberg article touched on the many things Wal-Mart is doing to show its willingness to make a difference. Who could forget the discounter's high-profile plan to push energy-efficient compact fluorescent lightbulbs in its stores? Not only did Wal-Mart conserve energy, but it also saved its customers money. And it met its goals for the initiative, too. That's just the tip of the iceberg in its environmental pursuits.

We may never see Wal-Mart sell a Toyota (NYSE: TM) Prius or a hybrid Honda (NYSE: HMC) Civic. The very idea does sound a bit outlandish. But the real takeaway is that Wal-Mart seems to be aware that many consumers care about much more than just low prices. That it's even discussing such seemingly outlandish possibilities suggests that the company is willing to think outside the big box now. Maybe Wal-Mart's recognition that it has to evolve will even help it get the growth back on track again.    

For more on Wal-Mart:

Wal-Mart is a Motley Fool Inside Value recommendation. Costco is a Motley Fool Stock Advisor pick. You can try out either service free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.

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Stocks Mentioned

Walmart Stock Quote
Walmart
WMT
$131.31 (0.96%) $1.25
McDonald's Corporation Stock Quote
McDonald's Corporation
MCD
$243.76 (-0.89%) $-2.19
Target Corporation Stock Quote
Target Corporation
TGT
$148.71 (-2.56%) $-3.90
Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$480.30 (2.98%) $13.90
Honda Motor Co., Ltd. Stock Quote
Honda Motor Co., Ltd.
HMC
$22.81 (-3.02%) $0.71
Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
TM
$135.62 (-1.21%) $-1.66

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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