I’ve enjoyed reading articles in the Times business section about this. WalMart is hardly ready to go belly up, but they are being out-performed by Target. Their target market is relatively low income people, and these people have been hurt by the stagnation of wages at this end, and by high gas prices. They’ve realized that more fashionable clothing gets higher margins, but their attempt at this was a disaster.
I doubt PR will kill them, but if a significant amount of their target market find Target to be worth the small extra money you pay, they can start declining fast.
I agree that if a supermarket doesn’t want to put on enough checkers, the self check line is a good thing. The Albertson’s near me has a self check line and not enough checkers, the Safeway has enough checkers and no self check line. I hate the Albertson’s (for other reasons also) and only go there if absolutely necessary.
The Times last week had an interesting article on how the Whole Foods market in NY is using a single line (like banks and airports) and enough checkers, and how this has cut down average wait times a lot. They also deliberately built enough checkstands. If more supermarkets did this, it would help a lot.
I like the self-checkout on occasion. When the checkers are buried three to four shoppers deep, and all I have is a couple of items (cough)condoms and booze(cough). Whatever gets me on my way faster.
WalMart is approaching the point where it won’t have to worry about things like customer satisfaction - things like that are only imporatnat when customers have the option to go down the street to another store. WalMart will be like the government stores in the old Soviet Union. People will be standing in long lines to buy crappy merchandise; they’ll be unhappy but they won’t have any better option.
If WalMart goes down, it’ll probably be from something like Amazon. Some online company will realize it can undercut WalMart by eliminating all of the overhead of running stores.
The Chinese Mega Mart wouldn’t even need to expand into the US to cause problems for Wal Mart. All it would have to do would be offer Wally World’s suppliers a better deal and they would defect in droves.
I like the self checkout not only at Wal Mart, but Kroger. Maybe it’s being male; I don’t have to talk to anyone, I have three items and cash.
My conspiracy theory of the week is that there is a formula to calculate how many checkers should be in the store in relation to customers. It is a function of time of day. Management wants fewer checkers than needed to save money, but not so few that many folks leave the socks on the way to Target.
My many arguments with libertarians and conservatives on this board with regard to things like fair wages, medical care and affordable housing for workers have convinced me that you simply cannot overestimate the willingness of people to inflict misery on others when there’s perceived to be a dollar in it for them. In China, with its long, not-so-proud tradition of enslaving, torturing and killing its people, it’s gonna be a LOOONG road before anything LIKE “fair wages” gains any traction with the powers that be.
Probably a combination of incompetent management and competition.
Walmart has been able to become what is has become through a truly innovative supply chain and logistics management operation. While I’m certainly no WalMart fan, their operations are a thing of beauty. However, they’ve been imitated, and therefore WalMart no longer has any competative advantage here. Target can do what WalMart can do. So they are more vulnerable now - the sort of innovation that WalMart has done isn’t something that happens every day.
Otherwise known as 3D printing - the ability to manufacture one-off solid objects. It’s a fast-developing technology and you can now buy desktop ‘3D Printers’ that will fashion small items out of plastic by one of several slightly different methods.
I don’t think it represents a massive threat to anything in particular, just yet. It might impact the toy market first, if anything.
This argument reminds me of an old friend. When ordering hamburgers he would sit there picking out and throwing away all the onions, as he hated them. When asked “why don’t you just order them without onions?” he would say that since he had paid for the onions he was going to make sure that he got them!
Why on earth would I want to stand in a manned checkout line if it would take me longer than self-checkout? Standing in line for longer just to get your money’s worth from the portion of your groceries that pays for the clerk’s salary makes no sense, especially if this would take up more of your time than the self-checkout.
I also don’t feel that artificially creating mimimum wage jobs is a fruitful exercise.
There’s some evidence that they may have already peaked, at least in the US. Identical sales growth for last year was something pitiful like 1%, when most of the other major retailers were pushing 5%+. They’re getting stomped by Target on the general merch side and by Kroger on the food side.
If you look at their numbers, it quickly becomes apparent that virtually all of their sales growth is coming from outside the US, where there are still plenty of weakly-positioned mom-n-pop shops to stomp all over.
My prediction: In ten years, the US division is going to look a lot like K-Mart did maybe five years ago. Their razor-thin margins are not going to make investors too happy with the notion of renovating or replacing many of the aging stores, and they really don’t have a strategy for growth other than opening up new stores. Once there’s a Wal-Mart at every location in the United States where a Wal-Mart can possibly exist, they’re screwed.
Disclaimer: I work for one of Wal-Mart’s major competitors, though not on the retail operations side of the business.
Please give an example of a failed major retail chain that was due to government meddling rather than ordinary, run of the mill incompetent management, failed spinoff ventures, etc.
I can accept the idea of people who are willing to inflict these things in order to enrich themselves - history is full of examples of personal greed trumping morality. But what amazes me is the modern phenomenon of people who argue we should abandon fair wages, medical care and affordable housing so that somebody else can become rich. I can understand somebody advocating feudalism to be a lord; it’s the people who want to create a system so they can be serfs that confuse me.
Having worked at F. W. Woolworth for 20 years, I can tell you poor management decisions might eventually lead to WalMart’s demise. This is what killed FWW. We were the last major chain to pay by paycheck(Yes, we were paid *cash *from the weeks receipts throughout most of the eighties. :eek: ), the last to use computer run cash registers(Yes, some depts *used *hand cranked registers :eek: ), and the last to automate warehouse and restocking(but all ordering was still handwritten and the warehouse clerks weren’t allow to directly enter into the computer - both were done by the accounts receivable clerk, whose work was put on hold if ever she was sick). I could go on but this is about Walmart who is pretty much FWW’s successor.
Brainiac4 and I were just talking about this (yeah, geeky business conversations in our house). It does sound ludicrious but there are a few things WalMart does that keeps them in low margin products - and low margins are really susceptible to being wiped out by SG&A increases - one is the lack of customer service and the inconvience of shopping at WalMart - they move things around in their stores constantly - which increases the impluse buy add ons, but decreases the number of 'burb Moms swinging in to pick up Era really fast. Add the long lines and the 'burb Moms just go to Target or the grocery store. Which creates a Target/Grocery habit for that person and they don’t go into WalMart. Without high margin items to support SG&A, Walmart may need to increase prices on their low margin items - allowing Target (or another competitor) to beat them on price. That could create a mismanagement spin for WalMart (I don’t think its likely, but its possible), coupled with lack of expansion in the U.S., a few bad business decisions overseas, they could become vulnerable.