Retailers emulate Wal-Mart's focus on necessities

NEW YORK -- The world's largest retailer, whose annual meeting is set for Friday in Fayetteville, Ark., about 25 miles from its headquarters in Bentonville, Ark., continues to rapidly gain new shoppers with its focus on the basics.

Its rivals are stretching beyond their longtime boundaries to keep cash-strapped consumers coming in the door.

Target, known for cheap chic clothing and home accessories, hopes boosting its grocery offerings will help it grow. It is also relaunching an in-store line of home and personal-care products like sunscreen. Toys R Us, which has long carried baby formula and diapers, is rolling out a new section in 260 of its almost 600 stores with more consumables, like paper towels, hand soap and detergent.

Ken Perkins, president of RetailMetrics, noted there was a good reason consumables weren't seen as a growth engine before- profit margins are much thinner in food than apparel or home furnishings.

"It's boring, and there's not much glamour," Perkins said. "But Wal-Mart has set the gold standard and the path to follow in recessionary times."

Merchants are realizing that if shoppers are going to keep spending less, stores need them to come in more frequently. Offering a greater range of necessities will help.

Sales at established Wal-Mart stores, known as same-store sales, have been one of few bright spots in retail since the recession began in late 2007.

Necessities like groceries and health and wellness items accounted for about 60% of Wal-Mart's revenue of $405.6 billion last year, bringing in about $243 billion.