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WMT Looking a lot like Dell….

Click on Wal Mart to learn the latest about how smiley is now frowny face.  Gee just yesterday everyone was worried about WMT taking over the whole country, now they can’t seem to compete with TAR SHAY!  This is a business in its mature phase, lots of good managerial accounting points in the article, notice how the bottom 100 stores are not doing nearly as well as the top 100, I guess like MCD we can’t endure the indignity of actually closing poor performing stores to raise the results of the rest.  Would you?  For that mater, why are they still opening new stores?

Again success if fleeting, oh WMT is not leaving us but the stock is no only not doubling every few years, it is stagnant, like MSFT.

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6 responses to “WMT Looking a lot like Dell….”

  1. Lupe Barraza Avatar
    Lupe Barraza

    I say K.I.S.S. There is no need for Wal-Mart to continue building stores that are close driving distance from each other. They are too big of a retailer. I think more energy should be spent on improving the quality of the existing stores. Many of the stores are poorly staffed during rush hours, which makes them unappealing to shop in. I think the company is loosing focus of Walton’s original intent…to serve the customer. I think they are in a market all their own and they should not feel pressured to compete with other retailers like Target…they simply serve a different market.

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  2. Jason Raper Avatar
    Jason Raper

    A lot has been written lately about the middle-class becoming poorer. I wouldn’t look to count Walmart out yet, and if anyone has the ability to track its cost down to the last cent, they can do it better than anyone.
    My concern is that Target has gone into expansion mode until 2010. They are looking to double there amount of US stores in that time period. That typically means growing pains. With that much being invested in CAP-EX sometimes it takes a long time to see a good ROI; and the income statements take a hit for a while.
    Walmart has somewhat written the US market off as a cash cow; according to some analyst’s stories I have read lately in the WSJ. They seem to be focusing a lot of effort into China.
    I think Lupe has a good point about them expanding to so many stores. Eventually you can hit a logistical gridlock and not benefit yourself by carrying too much FIXED cost and way too much Inventory Carrying Cost (ICC)….(you will hear them talk about this a lot with their cross-docking efforts)
    Sometimes a company can focus too much on one area of their business and forget the rest. I cite Dell’s current situation as an example. They focused too much on production and ops cost and kinda left the design element out…they should have integrated that into their TQM.
    I KINDA LIKE TARGET BETTER, THOUGH. JUST A NICER ENVIRONMENT TO SHOP IN FOR ME.

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  3. Jeffrey Burkholder Avatar
    Jeffrey Burkholder

    I think that WalMart will be fine. They come up with something every year or two to gain market share and put the competition in the red. From their introduction to groceries in the late 80’s, to the lowereing of toy prices which crushed toy stores (Kay Bee and Toys “R” Us), to their current high-definition TV price wars (they sell flat panel for under $999, wal mart always seems to find a segment and dominate it. Curcuit City and Best Buy are in big trouble if you ask me. Walmart sells electronics and software at a better price, but with less selection.

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  4. Dennis Elam Avatar
    Dennis Elam

    WMT and Sam’s are a lot alike to me, I would buy consumeables, something that I will use up but not a durable good like a tv. Actually I am not a WMT shopper any longer. I would buy say a bag of pistachio nuts at Sam’s but not a computer, come to think of it, we just joined costco and I like it much better. You are right that they got market share going to groceries but the rate of increase is not what it was and so the stock is a mature industry. perhaps we should shutter the non performing stores, stop building new ones, and start paying a real dividend to shareholders with the profits

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  5. Dennis Elam Avatar
    Dennis Elam

    I guess the best comment I have read on discount stores, funny you don’t hear that moniker much anymore, is this one. Perhaps Jeff Foxworthy will modify this for one of his famous, You know you’re a redkneck if…..
    A lady speaks on why she likes shopping at the Dollar Store, Dollar General, Family Dollar, etc
    “The thing I like about shopping Family Dollar is that I don’t have to get dressed up like I do to shop at Wal Mart….”
    Hey, who says WMT isn’t up market

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  6. Matthew Moore Avatar
    Matthew Moore

    As the article mentioned, Wal-mart is putting up stores on average of one a day. Though they are growing as far as the number of stores goes, I feel that a majority of the stores are being built too close in proximity from other stores. I know Wal-mart competes on being the low-cost leader, but I think at some point in time, they need to go back re-evaluate some of their tactics, because I feel that competing based on low-cost can inevitably hurt the company. I will use a prime example: The electronics division. I had just moved out into my own apartment awhile back and was looking into buying a new TV. Having an idea of what I wanted, but not completely sure, my first adventure was to head over to Wal-mart because I know the prices will be low. Well needless to say, I did not find an employee that knew anything about any of the televisions, much less how to turn them on and off. The salesman, as I must say mentioned that there is an optional service plan that can be purchased, that will replace the TV should anything go wrong with my TV during the life of the service plan. Well I am familar with service plans, as I purchase a majority of my electronics from Best Busy and I tend to buy the service plan as it has done me good in the past. Well other than the price of the service plan, the salesman was unable to give me any other details about the plan. With these reasons, lacking of product info, I ventured over to Best Buy and I ended up buying my TV from there. Had the salesman had any clue about TV’s, my purchase may have been elsewhere. I think that customers like me, like to have some feedback on items like TV’s that can help in the process of purchasing an item like a TV. On the point, I did learn at Best Buy, that within the next few years that all TVs will require DTV broadcast technology, and unless you have this already built in feature, you will have to purchase a converter box, which to me is a bigger hassle then purchasing a TV with the technology already built in. Here is an excerpt about what I am talking about on DTV broadcast technology. Do you think the Walmart employee had any idea about this new system requirement? ha
    – TV stations serving all markets in the United States are airing digital television programming today, although most will continue to provide analog programming through February 17, 2009. At that point, full-power TV stations will cease broadcasting on their current analog channels, and the spectrum they use for analog broadcasting will be reclaimed and put to other uses.
    When full-power broadcast stations stop analog service, you still will be able to use your analog TV with a set-top converter box. Converter boxes for analog TVs receiving over-the-air broadcasts will be available in retail stores at that time. These boxes receive digital signals and convert them into analog format for display on your analog TV.
    No wonder Best Buy is taking over the electronic industry! Walmart needs to train employees or hire employees were knowlege can be of importance, like the electronic industry.

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