Wal-Mart doing more with less, and struggling, relatively speaking

You mean the senior citizens guarding the doorways aren't enough of a deterrence?

 

Could be ... if your strategy depends on huge contributions from your suppliers, one day you might turn around and find that you need them more than they need you.

 

Business being business, I'd guess that would only mean less leverage for Wal-Mart in negotiations with suppliers and not-quite-as-every-day-low prices for consumers.

 

And yet Costco thrives. What could be different about the business model at Costco? I wonder . . .

www.youngentrepreneur.com/blog/9-tips-for-business-success-from-costcos-jim-sinegal/

6. Rewarding employees. Costco provides exceptional benefits including medical with subsidies for spouse and dependent coverage, dental, vision and a 401(k) plan. Other pluses such as short and long-term disability and life insurance are part of the package. They even offer long-term care insurance for employees with more than 10 years with the company. Costco is also committed to promoting from within. Most of Costco’s managers started in a warehouse.

 

Yeah, but they got a ton of praise from environmentalists for the efforts to reduce packaging.

 

Stipulating that the scenario we're discussing is actually what's happening ...

Doubt it re: the prices ... There might be some wiggle room, but the leverage is going to cut into Walmart's bottom line, not its pricing. Consider Mizzou's post ... if Walmart raises prices, Mizzou ain't shopping there. His wouldn't be an isolated case. And a supercenter (which seems to be the norm for Walmart these days) isn't feasible at low(er) volumes. Walmart's still going to be a low-price destination* ... it's just not going to be as profitable.

*Frankly, I don't find Walmart to be all that cheap. I do live in a big metropolitan area, though, where the competition is intense. We do almost all of our grocery shopping at Kroger, where I play all of their loyalty games, etc., and feel that I come out ahead. For example, with loyalty points, etc., we tend to get about a $0.10 to $0.20 per gallon discount on gasoline (our local Kroger has added a gas station) AND my mobile phone (minutes + data) is all but free. I don't get the sense that we're paying more for our groceries when all is said and done, plus I shop at a smaller, more convenient store.

 

One thing I haven't seen mentioned yet is Wal-mart, like other big-box retailers, has to be getting slammed by online retail. (As an aside, I walked into a Best Buy the other day for the first time in forever. A once-thriving store that used to have a full parking lot now has the stink of death throughout.)

A lot of the big-ticket items you can buy cheap at Wal-mart you can get just as inexpensively, or at a somewhat competitive price, by ordering online. And you don't have to deal with the hassle of driving to an EnormoStore, parking, walking the long walk, fighting the shoppers, waiting in line, etc. My wife probably does 90 percent of our Christmas shopping online (for four kids) for those reasons.

Plus, Wal-mart's size was based on the idea you needed a zillion things on the shelves to get endless selection. Well, even the biggest-box store can't give you everything. For example, I got my 10-year-old son a Philadelphia 76ers T-shirt. First, forget me being able to find one of those at my local Wal-mart (in the Chicago area). Second, on the NBA Store site, I could customize the style, the name on the back, the number, patches, whatever, and get the shirt I wanted.

About the only thing I've gone to Wal-mart for in recent times has been groceries, but even then, any savings is generally trumped by all the relative inconveniences. Plus, its selection is certainly no better than most grocery stores.

While price is still a big driver, most of Wal-marts brick-and-mortar competitors have equalled or gotten close to it, and the shopping experience is so much better. Someone mentioned Kohl's a while back. The great thing about Kohl's is that it's reasonably priced, of reasonable quality, and you can get in and out in a decent amount of time. Wal-mart isn't going anywhere, but it's really being attacked on all sides.

 

Also, I've seen more stories pop up about how neighborhood specialty stores, even local bookstores, are thriving despite all the big-box and online competition. It makes me wonder if, really, shopping experience is everything right now, because there are plenty of options if you want something cheap, and that don't involve ever leaving your home.

 

A few months ago, I had a huge buggy of stuff from my local Wal-Mart, which is the only one for several parishes and several counties. I waited in line for 20 minutes, with endless price checks, people writing checks, people wanting to know the balance of their EBT cards, etc. I pushed the buggy to the side and haven't been back since.

I don't care that I'll have to spend an extra $20-$30 on staple foods at Kroger. I can get in and out of the store in a reasonable amount of time. I don't have to fight the crowds, wait for 20 minutes in line (no self-checkout at our store) and deal with all of the grotesquely fat people trying to run me over with their scooters.

 

You make a good point about the cost of time. Plus, price in the amount you pay for gas, and suddenly Wal-mart isn't so cheap anymore.

 

There's a walmart within a mile of our house and I wont go in there because the parking lot is a dump. McDonalds bags, soda cans all over the parking lot.

Clean up your home, Wal Mart. For me, saving a couple sheckels isn't worth the depression of walking through that pig sty.

 

The demeanor of people walking into Wal-mart reminds me of the way the zombies approached Monroeville Mall in "Dawn of the Dead." Except I think the zombies were happier to be there.