One of the things I really don’t understand about all this Wal Mart hubbub is why people don’t understand that Wal-Mart, like all corporations, has a limited shelf life, soon, within most of our lifetimes, to die (or worse, become irrelevant) like Sears, Montgomery Ward, A&P, Winn Dixie, Piggly Wiggly, Kmart, and a whole host of other national and regional players.
Back in college I once calculated Sears revenues accounted for a full 2.1% of the US GDP in 1972… today, Wal-Mart’s revenues are at 2.6% of US GDP. Sears dominated the American retail landscape for 100 years, and then nearly died, to be purchased by a discount retailer that itself was in bankruptcy two years prior to the “merger.” And Sears just wasn’t a mega-corp, it was an American Icon, the institution that made it possible for housewives in the prairie to get pot-bellied stoves, starched cotton shirts, the latest perfumes, and a whole host of “luxuries” quickly turned into necessities. Not to mention the catalog itself, a book put to many, many uses. :dubious: 
Today Sears doesn’t mean shit to people, a company largely supported by their financial services division, but still not worth saving from the likes of Kmart. Poof, gone, now no longer a proud organization that benefited our nation but a brand, a name for the marketers.
And Sears isn’t the only one. From the mid-twenties to the mid-thirties, A&P opened up over 14,000 grocery stores, wiping out local grocer after local butcher after local baker (I don’t know what happened to the candlestick makers - sorry.) They ignited a fiery storm of protest (overwhelmedin the greater story of the Depression, FDR, and Hitler) much like the one heard today, and are now no longer a market maker but a market taker, reduced to a regional grocer of 105 stores in New York/New Jersey.
So what about Wal Mart?
Of their $287 billion in 2004 revenues, they have an operating income of $17 billion, or 5.96% of gross revenues… many people here expect their stock portfolios to do better than this (so they then load up on Wal Mart.
) After taxes, etc, you end up with a mere 3.4% return for your efforts.
But for the company, it gets even worse. They pay out 21% of their income in dividends, leaving them with retained earnings of a paltry 2.7% of gross revenue! Sorry for exclaiming twice in consecutive sentences, but that’s horrible! The damn inflation rate in the US is 3.15% for March, meaning that with bad planning on Wal Marts part, their entire profit could be spent on inflationary pressures rather than increased capital improvements, acquisitions, R&D, and the all important “improving your cash position.”
Cite, PDF document, skip all the crap in the front and go to page 33.
Don’t get me wrong - they’re currently doing well, and things are proceeding and growing at a nice clip… but they’re not so large as to be unaffected by externalities such as bad management or somebody else coming up with a “better way”, as every single one of the above listed retailers found themselves to be.
Here’s my prediction: Some Asian store is going to come out of nowhere, supported by a home or regional market of 300,000,000+ and kick Wal Marts ass, just as Toyota is doing the Big Three. You wait and see. And then people will really be yelling! 