Walmart tried this some years back. They inventoried a sturdy upright bike with fenders&rack and a genuine Sturmey-Archer three-speed, painted in a tasteful medium brown all for $200.
They couldn't give them away.
Just as the problem is both with the stores and consumer expectations, the solution may not be something either can do on their own.
Part of why I was arguing for a community partnership was to market the
virtues of a sound basic bike, vs a more common featuritis bike that looks fancy in the store display.
Also Walmart isn't in the NYC utility cycling market Streetsblog was talking about - Target is now, though may not have been at the time.