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The story of retailer Wal-Mart Stores, Inc.'s (NYSE: WMT) growth in the last 18 months or so has not been well-received by the market or many of the company's larger shareholders. Add that to the fact that Wal-Mart shares have not really moved anywhere in the last 60 months and you have to wonder if the company will ever be able to get back to the growth it witnessed in the late 1990s. Can such a large company maintain torrid growth? If history serves, it's very hard to perform such an action. Scratch that -- it's virtually possible.By now, even Wal-Mart has said as much -- more than the ubiquitous Supercenter will be needed if the retailing behemoth is to grow in the U.S. market, which is its largest by far. Other global retailers are competing just fine with the retailer in markets outside the U.S., with Europe's Tesco being one of them. In fact, Wal-Mart took a different turn in 2006 by joining with or buying competitors in China (Trust-Mart) and India (Bharti) to gain an instant foothold in those growing markets.
But when Wal-Mart planned a U.S.-based Supercenter expansion that would have added more square footage than what Tesco's entire global retail square footage already stands at, the question was: aren't there already enough Supercenters in the U.S.? Can Wal-Mart really grow just by using 'market suffocation' strategies instead of being more innovative with its operations?
With Tesco set to open some smaller 10,000 square-foot stores in California in the next few years, it appears that Wal-Mart is taking a page from that strategy. Wal-Mart may be realizing that a bevy of store formats and sizes is a better plan to growth (and to keeping some towns and cities happy) than planting the same big-box store in any American landscape (that is already filled with too many as it is). This is a great strategy for the retailer, and it's been a long time coming. The "one size fits all" store format is a dinosaur now. The retailer must customize the merchandise selection, store size and format to the area being served, or a competitor will do it first.
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Reader Comments (Page 1 of 1)
8-27-2007 @ 3:50PM
roudy11z said...
Brian again you are right on. This problem Wal-Mart has starts with the Walton family, the board, and Lee(wennie fuzz)Scott. Get them out and Wal-Mart would do just fine. I am still hoping not to have to be in charge of the funeral arrangements for Wal-Mart and Lee and just maybe we won't have to have one.If we do I want you to speak at the service. OK?
8-28-2007 @ 7:45AM
pearl said...
walmart would be a lot better store,if they added customer service,when you go shopyou can never find someone to help you.they have a bunch of chech out registors,but maybe 4 or 5 open with long lines.if you do find someone to help,they usually point you towars the area,that is not what most people want,but the sales person needs to get back to the crowd so they can hear whatever they were talking about before the custmor so rudely interuped.
8-28-2007 @ 12:51PM
mdw0526 said...
The real issue is that the vast majority of people who will ever shop at any type of Wal-Mart store, already do. Those of us who do not now shop at Wal-Mart, will never shop at any of their offerings, even if it is a smaller, urban format store.
Those of us, and we number in the millions, who avoid Wal-Mart for any number of reasons, are the educated and affluent who Wal-Mart wants, and will never get.
Target and other discounters get our business for a lot of reasons, not the least of which that Wal-Mart is tacky and cheap and since price isn't our primary driver, we will always avoid Wal-Mart.