Why doesn't Wal-Mart sell lottery tickets?

I used to be in management at WM, and if I had to guess, there's a couple of reasons:

1 - no markup = no profit. Simple.

2 - quick sale = no impulse buying. If you can run into a store (like a 7-11) and grab a coke and a lottery ticket, you're happy. Ever spent that little amount of time in a WM? No? Neither have most people. :) WMs are designed to suck you in and get you to buy other things. That's why the coke, beer, milk, and diapers are waaaaaaay in the back normally.

3 - Too time consuming for associates = long lines. It sucks bad enough waiting in lines for the service desk associate to figure out how to return some dude's toaster, I don't want to make the line worse by people waiting for lottery tickets.

So there's a couple of reasons - no profit margin, no add-on sales, and takes away too much associate time. Wal-Mart is a cagey, smart, street-wise organization designed to make money... they don't need to have something like lottery tickets in the stores to draw people in, nor do they need it as a service to keep people coming back.

Rumor has it that they are trying it out at selected stores in Canada though, so we shall see....

Comments

How do you know for sure that there is no markup on lottery tickets?
- Report
by Tondoteottotote on March 2nd, 2007
I should be more clear on that - WM makes a lot of profit by buying in extraordinarily large quantities at the cheapest possible price, then selling that item in the stores at the highest margin that the market will sustain. The state gets all the lottery tickets to the vendors at the same price, paying them a commission on end-user sales. Everyone's profit margin is the same, but obviously the more tickets you sell, the more commission. WM has probably done the cost-benefit analysis on lotto and decided that it wasn't worth the expense of space and manpower.
- Report
by Teri00 on March 2nd, 2007
That all makes sense but I don't agree with #1. I work at a large convenience store chain and know for a fact there's quite some profit for lotto.
- Report
by sir_scutter on April 2nd, 2007
There's profit (see my comment above) but not enough to make it worthwhile. WM knows to the penny how much profit every square foot of that store is making. Why waste time, sq footage, and payroll to man a lottery ticket booth when it's not going to drive higher margin sales?
- Report
by Teri00 on May 12th, 2007