The Big Boss of the Big Box Big
Year
August 11, 2014
Box consolidations and reconfigurations are taking fast course corrections toward optimizing their business models, to include Wal mart, Lowe’s, Home Depot, Kohl’s, Kmart, Target, Costco among others. We all remember the glory days of Kmart and how a slowly creeping transcendence sandwiched the Neighborhood department store between low price point participants such as Wal mart and higher price point players such as Target, leaving Kmart’s long
standing household identity in question to this day. This edition of Simon Says will focus on a destination that is only IS miles away from 90% of all Americans and collects 8 cents of every U.S. dollar spent, with an employee force larger than national populations and sales revenues larger than national GDP’s. Walmart is co incidentally facing tightening price gaps amongst competitors that could lead to a performance plateau. The Walmart formula of formidable profitability at the industry’s pinnacle ret ailing standard is now taking on a smarter and savvier segment, with all eyes focused on the Walton family behemoth. The Walmart approach of acting fast and experimenting often was closely studied and assimilated by another industry icon, Amazon founder Jeff Bezos. Ironically, as of late Walmart’s CEO Doug McMillon reportedly advised his top executives at a recent high level meeting to complete a homework assignment by reading .. The Everything Store”, a t ell all book about Jeff Bezos himself. Consecutive reporting of five straight quarters of negative store sales have layered into pressing issues.
such as overseas allegations and union challenges, along with having struggled in overseas expansion plans (aside from Mexico and Canada. The need for new store concepts and online strategies is being urged more than ever as Amazon and dollar store expansions continue to make inroads. One leading initiative is a new smaller footprint, a grocery and convenience store as opposed to the heralded Supercenter. The .. everyday low pricing·· trademark slogan has quietly slipped under the rug in hopes of highlighting the latest “dynamic pricing·· system. thereby enabling more price maneuvering relative to conform to itemized price placement along the way. Notwithstanding and, nonetheless. Walmart has yet to be the brand to rest on its laurels. The global retailer continues to smell the cheese by vigorously employing a sniff and scurry school of thought to understanding their playing field and adjusting to it. Walmart has remained an astute apprentice of what it means to not only get to the top but more importantly how to stay at the top. A worthwhile mention is online sales growth slowly superseded Amazon last year at 30% upswings in contrast to Amazons 20% rise. The question is will the online and smaller store programs detract focus from their bread and butter traditional store profits. Thousands of existing Superstores and Superstore shopping carts will be at risk of less customer connectivity if so.
What This Means to You:
How to assess and invest in retail matters. To the extent that your next acquisition could be too close to a Walmart or not close enough. Walmart is generally known to spruce up the schematics of one trade zone to the next. as a highly acclaimed retailer and major draw. The draw factor is a vantage point conundrum that coagulates the same questions. do retailers feed off Walmart performance or does Walmart pirate the performance of surrounding retailers? Depending on radius relevance and market sha refactors. I would venture to suggest a bilateral conclusion of case-by-case circumstance. Having transacted deals with surging and sluggish store sales when in and around our favorite big box. the talk of the trade relates to site specifics and who the retailer is.
