Is WalMart finally Dying?

[DrVenkman]

WalMart has been under pressure operationally for some time however the company management has been pretty good at controlling costs. However last night the company reported results and not only is store traffic slowing, but margins fell by over 2% versus expectations. A 2% miss in margins for WMT is gigantic and the negative leverage is substantial. If you read the press release what is company citing?

Top 2 issues- Increase in wages and Build out of E-Commerce-

Is it finally over for WMT and has AMZN won?

Going to be a lot of empty big-box Walmarts sometime soon in the future.

 

[stout1]

Story as old as time. 2nd and 3rd generation family ownership screws it up.

They have lost the PR battle with so little fight it is stunning to me. I guess when your choice is to extract as much wealth out as opposed to responding even a little to bad press it isn't hard to chase the money.

 

[22*43*51]

It is only natural to see margins erode in the face of "across the board" wage increases. That topic has been debated over and over again on this site; As late as last week.

Wal-Mart will have to respond as to how to take that cost out of the business and recover margins.

The easy way will be to pass the cost on to consumers and forget their "everyday low prices". Or, they will go after a fixed cost reduction of some sort.(close poor performing stores, decrease benefits, etc.)

I would expect them to raise prices on some products. I don't think it will decrease foot traffic in their stores. At this point people have been trained like Pavlov's Dog to show up at a Wal-Mart and assume they are getting a good deal.

Just ratchet up the cost of living some more.

 

[QChawks]

No. Poors just waiting for end of month Obama checks to blow more $.

 

[aflachawk]

Story as old as time. 2nd and 3rd generation family ownership screws it up.

They have lost the PR battle with so little fight it is stunning to me. I guess when your choice is to extract as much wealth out as opposed to responding even a little to bad press it isn't hard to chase the money.

The Walton family owns a lot of stock but this is not a family run company. It probably different shopping choices. E commerce, etc

 

[DavenportHawk8]

Well when it takes you 20-30 min to check out at most stores, it isn't worth it.

I would rather pay more at Target, Hy-Vee, and walgreens and other stores, than to suffer through a trip to Wal-Mart. Hands down the worst experience for anyone and the last time I was in there, I am pretty sure I saw a 300lb women with her thong hanging out. I about lost it in the isle and therefore will never return to Wal-Mart.

 

[moral_victory]

Well when it takes you 20-30 min to check out at most stores, it isn't worth it.

I would rather pay more at Target, Hy-Vee, and walgreens and other stores, than to suffer through a trip to Wal-Mart. Hands down the worst experience for anyone and the last time I was in there, I am pretty sure I saw a 300lb women with her thong hanging out. I about lost it in the isle and therefore will never return to Wal-Mart.

I can't bring myself to suffer a trip there. Schnuck's, Jewel, or Target for me.

 

[stout1]

The Walton family owns a lot of stock but this is not a family run company. It probably different shopping choices. E commerce, etc

They own well over 50% of the stock, hold 3 of the BOD seats in their family. They also have deep ties to a couple other directors through charitable donations and they have been adding non-independent retired Walmart executives to the board.

Once they own over 50% of the shares, there was no longer any need to conform to the SEC rules about private/independent membership quotas for board members nor shareholder approval of board members. They have effectively consolidated control of the board thus the company by buying back stock and changing the mix of the board without the need for shareholder approval.

Just recently, they have made some noises that they will reduce their % of the shares owned, but they are doing it by putting it to a trust that they control.

 

[Run&Blade]

It's disgusting in their stores. So many freaks in there it makes me not go unless completely necessary.

I like most would rather pay a little more and not look at the trash.

Why does every Walmart have 30+ check out lanes and only 6-8 open?

These places should not be open 24/7. The down time should be used to clean up their stores and force the losers out.

 

[LuteHawk]

Your "local" WalMart has cut back on staffing and this
includes not only check-out people but also those who
are behind the scenes unloading products and putting
it on the shelves.

WalMart stores are taking a beating on the grocery
section as competitors like Krogers, HyVee, and others
are having more sales to compete.

For general goods, stores like Target have a more appealing
environment. There is an element of unsavory people shopping
at WalMart and this discourages some from going there.

 

[Mattski]

While Walmart has had tremendous success, creating a culture and environment with your business that appeals to a customer base with low levels of disposable income probably wasn't wise. That said, I hope they don't start closing stores as having them at least helps concentrate the dregs of society in 1 shopping location most of the time.

 

[Old_wrestling_fan]

This is not the first time that a large company has had a relatively minor slip or downturn that then spawned a thread here on HROT predicting the impending demise of said company...very, very, very, very prematurely.

Yes, the latest news is probably cause for action for Walmart and yes, the stores have many off-putting characteristics for some...but...ol' Wally is still slightly profitable, in the billions of dollars per year range profitable...harumph!

So I am pretty sure the reports of their death are greatly exaggerated here.

 

[Funky Bunch]

Because more people are working and don't have time to go to Walmart

 

[LuteHawk]

WalMart is not going to die and go out of existence.
Instead, it will continue a slow decline in its market
share in the U.S.A. The competition has finally
caught up with WalMart. Also, it is no longer a nice
place to work as they are losing their good employees.

 

[ottumwan in tx]

amazon, it is in the news, is in bad shape, so I guess somebody had to do a hit piece on wal mart

 

[bagdropper]

If it takes 20-30 minutes to check out at a Wal-Mart, I'd never ever go there again.

I go to the self-checkout, and am out the door no more than 3-4 minutes tops - and most times, 1 minute. The only time I use a cashier is if a lane is empty.

I go there for two reasons. One, they have certain stuff for less and I know in every WM ever made where it's at, and they also have stuff in stock other places either do not carry in the (food products) size I need, or if at all.

If it's food in a box or can or plastic container, I pretty much always go to WM for it if I can. I just try to time it to where I got on a Saturday or Sunday morning about 7am so I'm dealing with little of the riff raff as possible.

 

[TennesseeWaltz1]

Your "local" WalMart has cut back on staffing and this
includes not only check-out people but also those who
are behind the scenes unloading products and putting
it on the shelves.

WalMart stores are taking a beating on the grocery
section as competitors like Krogers, HyVee, and others
are having more sales to compete.

For general goods, stores like Target have a more appealing
environment. There is an element of unsavory people shopping
at WalMart and this discourages some from going there.

 

[Besthawkfan]

I only go there for oil. The price on their 0W 20 synthetic is 12 dollars cheaper than Auto Zone. That is the 5 quart.

 

[LuteHawk]

Nice to hear that Bagdropper goes to WalMart at 7 am
on Sunday mornings on his way to church.

 

[who r u]

Well when it takes you 20-30 min to check out at most stores, it isn't worth it.

I would rather pay more at Target, Hy-Vee, and walgreens and other stores, than to suffer through a trip to Wal-Mart. Hands down the worst experience for anyone and the last time I was in there, I am pretty sure I saw a 300lb women with her thong hanging out. I about lost it in the isle and therefore will never return to Wal-Mart.

^^ this ^^

how dumb/tone deaf do their executives have to be to ignore what seems to be a universally known problem at their stores. most everyone i know or talk to about walmart always brings up the check out as a major factor for no longer shopping there. the check out line is your last and final experience at the store and if it is a poor experience then your recollection of your entire shopping experience will be tainted. i used to shop there regularly but the check out just got way to frustrating and now i pretty much never shop there. as far as the self check out goes i dont like using them because they always seem to have a problem and i dont work for them so unless im going to get a discount, why should i use them.

 

[GarryO37]

amazon, it is in the news, is in bad shape, so I guess somebody had to do a hit piece on wal mart

The negative things in the news about Amazon are about the work environment. Amazon is not in bad shape.

 

[bagdropper]

Nice to hear that Bagdropper goes to WalMart at 7 am
on Sunday mornings on his way to church.

Nice try. Never been to a day of church in my life.

 

[bagdropper]

I only go there for oil. The price on their 0W 20 synthetic is 12 dollars cheaper than Auto Zone. That is the 5 quart.

Yep. I get all my automotive fluids there. I own two used BMW's...oil changes are expensive going full synthetic at 7-8 quarts each. Three 5 quart jugs, 2 filters - and both vehicles are good to go for less than $100 total. Anywhere else where someone else does it, double that cost if not more.

 

[hooper56]

I think it is more Cosco and to a lesser extent Target that is cleaning Walmart's clock. I think amazon has had an impact too but not as the primary competitor.

 

[JRHawk2003]

To me its following the same pattern as K-Mart and other retailers who were big, but later faded away.

Does anyone remember Woolworths? Sears is fading too.

Wal-Mart is getting it on both ends. Its getting hit from Target from those willing to pay a bit more, and from below from the likes of Dollar General. Not to mention Amazon, etc.

There is a life cycle it seems to big retailers. They rise, have a dominant era...and then fade.

 

[hooper56]

Being the lowest priced seller is not a sustainable model. Eventually someone comes in who has less overhead and cuts your throat. I have seen it a hundred times.

 

[GarryO37]

Being the lowest priced seller is not a sustainable model. Eventually someone comes in who has less overhead and cuts your throat. I have seen it a hundred times.

That "someone" has been WalMart several decades now, and you've probably seen WalMart doing the throat cutting a hundred times.

 

[LunchBox50]

I haven't stepped foot in a Walmart since I moved to Madison over two years ago. When you live in a larger place where it isn't necessary to go there, ever, that's what happens.

 

[bladel]

Well when it takes you 20-30 min to check out at most stores, it isn't worth it.

I would rather pay more at Target, Hy-Vee, and walgreens and other stores, than to suffer through a trip to Wal-Mart. Hands down the worst experience for anyone and the last time I was in there, I am pretty sure I saw a 300lb women with her thong hanging out. I about lost it in the isle and therefore will never return to Wal-Mart.

Customer experience is everything.

Several years ago, my daughter was leaving for a school trip and needed some last minute supplies. As it was the only store open 24 hours, I dashed over to Wal-Mart. At nearly 3am, the aisles were full of people, including screaming babies and toddlers wearing only diapers. It was surreal. Haven't been back since.

 

[JRHawk2003]

Customer experience is everything.

Several years ago, my daughter was leaving for a school trip and needed some last minute supplies. As it was the only store open 24 hours, I dashed over to Wal-Mart. At nearly 3am, the aisles were full of people, including screaming babies and toddlers wearing only diapers. It was surreal. Haven't been back since.

Well when you have a whole website devoted to it...it cant help your perception

http://www.peopleofwalmart.com/

 

[sdhawkeye]

To me its following the same pattern as K-Mart and other retailers who were big, but later faded away.

Does anyone remember Woolworths? Sears is fading too.

Wal-Mart is getting it on both ends. Its getting hit from Target from those willing to pay a bit more, and from below from the likes of Dollar General. Not to mention Amazon, etc.

There is a life cycle it seems to big retailers. They rise, have a dominant era...and then fade.

This is the correct answer.

 

[TexMichFan]

To me its following the same pattern as K-Mart and other retailers who were big, but later faded away.

Does anyone remember Woolworths? Sears is fading too.

Wal-Mart is getting it on both ends. Its getting hit from Target from those willing to pay a bit more, and from below from the likes of Dollar General. Not to mention Amazon, etc.

There is a life cycle it seems to big retailers. They rise, have a dominant era...and then fade.

Big difference between the two on the real estate end. Walmart owns and developes most if not all their locations and K-Mart leases theirs.

 

[DrVenkman]

amazon, it is in the news, is in bad shape, so I guess somebody had to do a hit piece on wal mart

Amazon has a bigger valuation than WMT and does 1/5th the revenue. Amazon is groing 8x+ faster than WMT.

No need to do a hit piece. WMT is taking care of it on their own.

 

[TennesseeWaltz1]

Funny how all the libs want to thrust the poor on everyone, have them move into high class neighborhoods in Section 8 housing and pay huge tax sums to support them and all their chillen and baby daddies but when confronted with their presence at Walmart they don't know whether to chit or go blind...

 

[DrVenkman]

Funny how all the libs want to thrust the poor on everyone, have them move into high class neighborhoods in Section 8 housing and pay huge tax sums to support them and all their chillen and baby daddies but when confronted with their presence at Walmart they don't know whether to chit or go blind...

The solution may be to use all the soon-to-be-shuttered WalMarts as housing for these people. As this lady has shown she found a great new area to take a dump.

http://www.thesmokinggun.com/documents/revolting/kmart-pooper-popped-765920

 

[TennesseeWaltz1]

The solution may be to use all the soon-to-be-shuttered WalMarts as housing for these people. As this lady has shown she found a great new area to take a dump.

http://www.thesmokinggun.com/documents/revolting/kmart-pooper-popped-765920

Well you know Venk when you gotta go you gotta go. I am sure this stellar creature will soon be moving South to become yet another northerner added to our already heavy welfare load.

 

[DaveSnedeker]

The WalMart on West Kimberly in Davenport is one of the weirdest places on the face of the earth. I ducked in there last time I was in D'port (watching high school buddies play softball at the Dugout) and was amazed at the lack of clothes, parental supervision and decorum that was going on. If Armageddon does come, I have a feeling it will be akin to what I witnessed at that WalMart.

 

[DrVenkman]

Well you know Venk when you gotta go you gotta go. I am sure this stellar creature will soon be moving South to become yet another northerner added to our already heavy welfare load.

They do seem to like the warmer climates.

 

[bdg8]

Amazon has a bigger valuation than WMT and does 1/5th the revenue. Amazon is groing 8x+ faster than WMT.

No need to do a hit piece. WMT is taking care of it on their own.

Yet, has Amazon ever shown a profit?

 

[DrVenkman]

Yet, has Amazon ever shown a profit?

yes- 3 out of the last 4 years it has and expectations are for a profit this year which should triple in 2016.

Whether or not AMZN makes net income has little to do with what it and many others like it are doing to the legacy retail model. WMT is one of the bigger remaining examples of that. Other big box companies like HD and TGT are doing things much much better. WMT has been poorly managed yet still has a huge presence.