WAL-MART TO STOP SUPPLYING SALES INFORMATION

DAVID GHITELMAN

BENTONVILLE, Ark. -- Wal-Mart Stores here said last week it would stop selling its sales data to market research firms as of late July to keep the information out of the hands of its retail competitors.

The research firms contacted by SN said they were in continuing talks with Wal-Mart and hoped the retailer would reconsider its decision. They added that they either have plans in place or are developing plans to meet their customers' need for sales data without Wal-Mart cooperation.

However, although Wal-Mart said it was withholding the information to stymie retail competitors, a retail consultant told SN he believed Wal-Mart's motive behind the move was to make its vendors more dependent on sales data Wal-Mart supplies them.

Bill Wertz, Wal-Mart spokesman, told SN, "After looking at the situation, Wal-Mart made the business decision that we didn't need to participate."

The company had determined that potential risks of selling the data outweighed the benefits, Wertz explained. "We were getting a look at the aggregate information and collecting a fee," he said, noting the pluses of selling the data, "but we decided we might be assisting our competition."

Wertz noted that the company will continue to share some information with its vendors. "To the extent Wal-Mart works with manufacturers and suppliers, nothing has changed," he said.

According to Wertz, Wal-Mart currently sells its sales data to five companies: ACNielsen, Schaumburg, Ill.; Audits & Surveys Worldwide, New York; Information Resources Inc., Chicago; NPD Group, Port Washington, N.Y.; and Sports Trend Info, Atlanta.

Wertz said Wal-Mart's contract to supply sales data to the first four companies expired last year and has been extended on a month-by-month basis since then. Wal-Mart will stop selling them information in late July.

However, the retailer is contractually obligated to continue supplying data to Sports Trend Info through the end of the year, according to Wertz.

Kris Sundberg, senior vice president, communications, IRI, told SN her company received ample advance notice from Wal-Mart and has developed a contingency plan "if they stay with their decision."

The information IRI had been purchasing from Wal-Mart, Sundberg explained, was "point-of-sale data from a sampling of 8% to 12%" of the retailer's stores.

IRI's short-term plan is to "start projecting data to replace the data from Wal-Mart," she said. "It's a standard statistical technique."

On a more long-term basis, Sundberg said IRI was "pursuing enhancements" to its 55,000-household consumer panel. "We'll replace point-of-sale data with consumer purchasing data. We're looking at the consumer panel as an enhancement, although some things aren't going to be as good as they were before."

Sundberg emphasized that IRI respects Wal-Mart's decision although it would like to continue purchasing information from the retailer. "We value our relationship with Wal-Mart," she said. "We are continuing our dialogue."

ACNielsen is also continuing to speak with the retailer, according to Matthew Bell, director, media relations. "We're focused on keeping the lines of communications open," he told SN.

If Wal-Mart does stop supplying ACNielsen with data, "we will have solutions in place," said Bell. "One solution may involve the use of our home-scan consumer panel."

Ken Teague, retail consultant, Reach Marketing, Westport, Conn., told SN he saw Wal-Mart's decision to stop selling data as part of the retailer's longstanding effort to get its vendors to use its own database, Retail Link.

"Retail Link is the largest database in the world," said Teague. "It's capable of reporting all sales by SKU in every single Wal-Mart by 4 a.m. the following morning."

All Wal-Mart vendors have access to their own sales data and to the total sales data of their categories, according to Teague. Vendors designated as category captains have complete access to all sales in the category, he added.

At Wal-Mart, Teague said, "everybody is required to be up to speed" with the database. The retailer also wants its vendors' staff to be "hands-on [with the system] up to the CFO-level," he noted.

Teague said consumer products giant Procter & Gamble, Cincinnati, has 300 to 400 people based in Fayetteville, Ark., who are charged with analyzing the Wal-Mart data, and the retailer would like for other manufacturers to take a similarly intense approach.

"Some large manufacturers have not done a good job of looking at this data," he said. "It causes Wal-Mart to have out-of-stocks. Wal-Mart wants them to take this seriously. It's been an ongoing battle."

Wal-Mart also said last week its sales for the quarter ended April 30 rose 11.8% to $48.1 billion, while income for the quarter increased 3.8% to $1.38 billion. Earnings per share were 31 cents, up from 30 cents.

Total company comparable-store sales rose 3.7% for the quarter, with a 3.5% increase for the Wal-Mart stores segment (which includes the company's supercenters) and a 5% increase for the Sam's Club segment.

For the quarter, net sales in the Wal-Mart stores division rose 11.7% to $30.8 billion, 7.5% to $6.5 billion in the Sam's Club segment, and 6.1% to $7.6 billion in the international segment.