Across the shooting industry, a universal expression of shock, anger and surprise at Wal-Mart’s announcement yesterday that it had agreed to a 10-point code of business conduct called the Responsible Firearms Retailer Partnership.

The responsible-sounding Partnership is a creation of the Mayors Against Illegal Guns organization, the group founded and co-chaired by New York Mayor Michael Bloomberg.

In signing the document, Wal-Mart has dealt the firearms industry – and the company’s various firearms-related suppliers – a blow that has taken everyone by surprise. Tommy Millner, CEO of Remington Firearms, Wal-Mart’s largest supplier of firearms and ammunition, told The Outdoor Wire Remington was both “surprised” and “disappointed” by the unilateral announcement.

Across the firearms industry yesterday, the responses were the same.

Wal-Mart officials appear to have reached their decision with no input from either their suppliers or firearms industry officials. For the world’s largest retailer, that’s apparently a departure from their normal business practices. Across the retail industry, Wal-Mart is regarded as one of the companies that routinely consults suppliers in significant business decisions.

This decision, however, seems to have taken everyone – including some Wal-Mart executives – by surprise. In recent supplier meetings, Wal-Mart reportedly reiterated a commitment to the firearms category, although sources say the company told attendees that firearms ROIs were “not quite where they needed to be.”

Despite being characterized as a “blindside” to the firearms industry, Wall Street retail observers tell The Outdoor Wire the decision appears to be yet another part of a concerted effort by the retailing giant to stem gains by rival Target. An effort one observer says is so frantic that “Wal-Mart appears blind to almost anything else.”

That emphasis, we’re told, has led Wal-Mart to a trifurcated business strategy; dividing stores into three categories: rural, suburban and inner city.

The rural stores – where Wal-Mart first achieved retail dominance – reflected the products and philosophies of founder Sam Walton. Today some on the management team feel the “rural” marketplace is fully matured.

Consequently, they appear to be busily (some would say frantically) trying to reposition product mixes to better fit with the suburban and inner-city desires. Those changes, retail observers say, are obvious in the mix high-end electronics from Apple iPods to high definition televisions.

No coincidentally, they say, key members of the Mayors Against Illegal Guns have inner city markets where Wal-Mart has either failed to have any success, or been denied entry entirely.

Last month, Wal-Mart reportedly summoned some fishing suppliers to Bentonville. They were told their products were squarely in the sights of Wal-Mart execs who felt, frankly, the fishing and “other outdoor categories” might be on the way out. “Out “as in reduced to seasonal categories or removed entirely. Like fabrics and other “rural products” the suppliers were told; fishing products were among those “new thinking” in Bentonville felt were no longer relevant to the company’s long-term goals.

For the world’s largest retailer to decide on a course of action as significant as being the first company to sign onto the “Responsible Retailers” code isn’t something that can be achieved by a mid-level manager. The had to be approved by the highest levels of the company.

For consumers, it may signal the commencement of an exit strategy from firearms and possibly the entire outdoor equipment category. When the extensive computer and video recording systems agreed to in the “Retail Partnership” are created and put in place, those associated costs may be tagged directly onto the products that were the reason behind the system’s creation –firearms and ammunition.

In a category where suppliers have already been told the ROIs are not where the company would like them, the additional costs could either be apportioned to suppliers – or tacked on to consumer prices. As Wal-Mart senior vice president and chief compliance officer J.P. Suarez said yesterday, “all decisions are not pain-free.”

Should that “pain” be assigned to suppliers, it could mean fewer companies selling to the retailing giant. That would reduce firearm and accessory selections.

Assigned to consumers, it might be the tipping point that sends them to other retailers.

Either action might drive down sales, providing a business-based reasoning that could be used by Wal-Mart to exit the category altogether.

As one industry executive told The Outdoor Wire yesterday, “yes, it’s a blindside, but it’s a sign that the worst may be yet to come.”

Today, Wal-Mart sells firearms and ammunition in approximately 1,100 locations across the United States. For Browning, Ruger, Savage, Remington, Henry, C-Z USA, Weatherby, H &R and Thompson/Center those stores along with the Wal-Mart online and catalog business, represent segments of their selling mix. For some, they are only a small segment, for others, including Winchester, Federal, and Remington ammunition, they represent significant annual sales numbers.

Whether this decision by Wal-Mart represents a business blunder (even Wal-Mart is not immune to bad decisions) or a calculated move to help accelerate an exit strategy from firearms altogether, it’s a negative for the firearms industry.

Should fishing also be on the bubble in Bentonville, it could be damaging to the overall outdoor category.

We’ve been told by officials across the fishing industry that “Wal-Mart has assured us they’re committed to fishing”. Based on their current involvement with fishing at a variety of levels, that seems to be a safe position. Only a very few weeks ago, however, Wal-Mart execs assured the firearms industry their support was solid as well. Today, that support seems to be conditional – at best.

That having been said, it is only fair to remember that Wal-Mart is, and has always been, a general retailer.

In a general store – even the one that finds itself to be the world’s largest retailer – the key is to keep products that sell and discard those that don’t.

No one has ever questioned Wal-Mart’s expertise at general retail.

And as always, we’ll keep you posted.

--Jim Shepherd

EDITOR’S NOTE: If you’d like to see the ten points of the
Responsible Firearms Retailer Partnership, click here.