Why Wal-Mart May Never Be Great Again (we could only hope)

[DainBramaged]

Wal-Mart (WMT) posted financial results Tuesday morning that aren't as encouraging as they may seem at first glance. Yes, net sales rose nearly 6%, to $108.6 billion, but that was fueled largely by a 10% increase at its Sam's Club warehouse clubs and a currency translation-padded 16% spike overseas. Sales at Wal-Mart's namesake domestic stores clocked in nearly flat.

Earnings per share from continuing operations did spike 12% to $1.09, but that also needs some clearing up. Aggressive share buybacks and a lower effective tax rate are forging the illusion that margins are expanding. In reality, pre-tax profits from continuing operations rose by less than 2%.

Investors may be somewhat relieved -- if not outright pleased -- by the report, but I'm not. Same-store sales at Wal-Mart locations across the United States fell by 0.9%. It's the ninth quarter in the row of cascading comps at the world's largest retailer.



Wal-Mart is losing shoppers. It's falling behind in the digital revolution. There are too many people out there relishing its failures, and it will become a self-fulfilling prophecy if Wal-Mart doesn't wake up and reposition itself properly.



See full article from DailyFinance: http://srph.it/mXZZHu



This is an interesting article, almost like Borders collapse on a grander scale.

[udbcrzy2]

1. Walmart is expensive

I have been there before and their prices are like that of the fancy grocer up the street from them (Schnucks). I love Aldis, they are really reasonable, great food and a union shop.

I do like Walmart brand coffee. That's why I go there, but that's about all I get when I do go there.

[Ikonoklast]

19. ALDI's is virulently anti-union.

They fire anyone that talks of unionizing.

[udbcrzy2]

22. Aldis starting wages 13.00 hourly in Missouri?

I thought they were union.

[nadinbrzezinski]

2. Alas Borders did not have stores all over the place

so I suspect that if they collapse in the US they will move HQ to Shanghai, or Mexico City.

[madrchsod]

3. google a&p....

it had a larger market share than walmart has.

[1monster]

4. Walmart was front runner in the move to export US jobs to other nations...

I remember years ago, when the trend to import cheaper goods from outside the US, and thus, export US jobs to other nations became clear, I wondered at the shortsighted stupidity of those who saw profits from that kind of policy.

Since the major market for the goods companies were importing were those in the US, they had to see that this kind of policy would eventually result in a smaller and smaller consumer market as jobs were exported in larger and larger numbers. If those who buy no longer have the money to spend, then the marketers would have smaller and smaller markets until there was no longer a sustainable profit.

When Walmart issued its alarm the other day, that poor people could no longer afford to make purchases, I could only think, "Well, duh!"

Can the people running our biggest corporations in this country really be that incredibly short sighted and stupid? I'd hate to think so, but the evidence is hard to deny.

[Ilsa]

9. Yes, shortsighted. They only cared about making a buck NOW, not sales later.

They shouldn't be surprised that their own employees can't afford to shop there. WalMart management obviously never learned anything from Henry Ford, who believed in paying his employees enough to be able to afford to buy his product, which they built.

[Jackpine Radical]

5. MallWart helped destroy the economy

by using slave labor abroad and paying shit wages with chintzy benefits to their American workers. Not to mention busting unions.

Guess what, you idiots!! When you starve people in your own country, they have no money to spend on your plastic junk.

[thelordofhell]

6. Wal-Mart desperately looking for cheaper labor than China

Their current model isn't making 10 billion in profit a piece for Sam Walton's worthless kids anymore

[KurtNYC]

7. Wal Mart will be fine.

The economy has made shoppers more price sensitive than ever and WalMart does well in that environment. WalMart shoppers have no place else to go in a search for lower prices. The flat numbers for the US are the result of more families being tapped out.

Low / No income people make up a very small percentage of online sales. WalMart is still growing its grocery business and no one buys groceries online (except maybe from FreshDirect which is a hybrid).

The hatred surrounding WalMart has led to a lot of myths. Emotion based thinking often leads to the wrong conclusions.

[DainBramaged]

10. Defending WalMart leads to a lot of hatred

from the workers who struggle to make ends meet while they did everything in their power to crush the Union, underpay female workers, and overwork the most vulnerable of their workers while laughing all the way to the bank. And then buying only the cheapest products they could find and forcing domestic manufacturers to relocate overseas to keep the glutenous Wal-Mart satisfied with low prices at a 25% or more margin for them, I SOLD TO THEM in the 90's I KNOW they are fucking scum. Sanyo BUILT a TV plant in Arkansas to direct deliver to Bensenville until the China factories killed that gem.


Bullshit on your defending them, bullshit.

[KurtNYC]

17. sadly they are far from the only company that seems to

"crush the Union, underpay female workers, and overwork the most vulnerable of their workers"

Not defending any labor practices, just giving the short analysis of their business model in this economy because I think that is relevant to a discussion of what their quarterly results are really showing and what that means for any trend in the US economy. I know it is unpopular to even SEEM to defend WalMart but honestly I think the big picture financially is that WalMart benefits in this economy.

[DainBramaged]

18. Tell that mug full of bull to the thousands of small businesses crushed by them

They are THE preeminent company that crushes Union participation, underpays female employees, and steals hours from the most vulnerable of their work force, the part timers and elderly.


And yes, your defense is more than unpopular.


:mad: :mad: :mad: :mad: :mad: :puke: :puke: :puke: :puke:

[workinclasszero]

8. Walmart killed the goose that laid the golden egg

You know the near extinct American middle class.

Just like all these other dumbass greedy capitalist pigs are doing, killing their own markets.

Maybe the chinese workers at the apple factories can save walmart before killing themselves eh? :sarcasm:

Or maybe the PhD's in India earning 10 grand a year?? :eyes:

[SoCalDem]

13. In Small-town, USA there used to be many levels of shopping

"Five & Dime" stores like Ben Franklin, Kresge, Woolworth's, SS Kress, Duckwalls, Neisners......many small towns had at least 3 or 4 of these.. My hometown (then about 20K) had ALL of these stores

then we had the Mom & Pop "shops"..boutique small businesses that we all think of when the term "small business" is used. Stores like dress shops, camera stores, shoe stores, book stores, hardware stores, furniture, etc.

In my town, the furniture stores would haul your old stuff back to their store & sell it used in their basement:)

then we had Penneys, Sears & Montgomery Wards

and finally the

upper crustie stores where clerks looked down their noses at most people who entered.

From the 70's -on, chain stores/malls/shopping centers killed all these places off, and gutted downtowns all across America, and left us with big-box stores selling chinese junk.

[DainBramaged]

16. I RAN a TV-VCR repair shop in the 90's for about 18 months while looking for corporate employment

and where did it get me? I fix computers to keep a corporation alive.


It was a great shop, we were SUPER busy. I fixed the VCR's and small appliances, a real great old guy (hah) did all of the TV repairs. And all of a sudden about 1996, unless it was under warranty (especially the BIG 32" and up glass tube TV's) people stopped coming in. Why, because all of the electronics you could buy started coming from Japan (which today are considered super high quality) and oh the horror of cheap junk, China, and everything you bought then and now became totally recyclable, not repairable. The shop closed about a year after I left.


Look in the phone book (hah) or on line and find a TV repair shop near your town. Every town used to have one. Now they have a fucking Wal-Mart.

[SoCalDem]

20. My son laughed at me when I had the cord replaced on my old vacuum cleaner

We are lucky.. we actually still have a vacuum cleaner/sewing machine repair place and TWO shoe repair shops :)

I don;t know how they stay in business, but I'm glad they are there:)

[1monster]

25. Sewing machines! Remember when a sewing machine lasted a life time and was

passed on down to the next generation?

Today, if your are lucky, a $200 sewing machine lasts four or five years. Then the internal workings wear out and cannot be fixed because they are made with cheap plastics and nylon rather than the metal they once were...

[sfpcjock]

11. They closed the Sam's Club in San Marcos, Calif.

after not even being open very long.

[slay]

12. That right-wing shitty corporation was never great, or even good, to begin with

capitalism sucks.

[Ricochet21]

15. Yep

[robcon]

14. What's the big deal... you guys have stock in Target?

I could care less whether Wal-Mart does well or not so well.

Retailers are just retailers.

[progressoid]

21. Unfortunately the damage they have caused is vast.

Lower wages, outsourcing, low quality, etc. We may never recover from that.

[sarcasmo]

23. The really sad thing is they are still the #1 employer in America.

[eridani]

24. Henry Ford wanted to pay his workers well enough so that they could

--afford to buy his cars. MallWart wants to pay its workers so little that they can't afford to shop anywhere else. Now that they have succeeded beyond their wildest dreams, do you think they might be able to buy a clue someplace?