Wal-Mart Stores Inc.'s (NYSE: WMT) new Chief Executive Mike Duke will have his hands full once he takes control of the world's largest retailer on Sunday.
For one thing, the economy continues to struggle. Gross Domestic Product fell 3.8% in the fourth quarter, the most since 1982. Consumer spending fell 3.5% in the quarter as unsold goods continued to pile up. Though consumer confidence rose to a four-month high, it was still weaker than expected.
Some have argued that the weak economy benefits Wal-Mart because as money gets tight people are interested in finding bargains. Funny how you don't hear the jokes about Wal-Mart shoppers being low-class much any longer. I know plenty of college-educated people who shop in the store, and without fear of ridicule.
To be sure, though, the Bentonville, Ark. company has said it is not immune to the economic slowdown.
The question facing Duke and Wal-Mart investors is whether the chain can keep these new customers, particularly as Target Corp. (NYSE: TGT) among others try to lure them away with low prices. Moreover, as Reuters notes, the food inflation that helped bolster sales growth in 2008 has moderated.
The company also has to contend with the weakness in the Chinese economy. Last month, the chain offered huge discounts to lure customers to its stores in China. And you have to wonder whether the company's Chinese suppliers will boost prices to Wal-Mart. Will the company then have to raise its already low prices? Those questions are yet to be answered.
One of the biggest challenges Duke may face is in Washington. Support is growing in Congress to make it easier for workers to join unions. When President Obama says that unions are part of the solution and not the problem, that must send shivers up the spine of the strongly anti-union company.
Shares of Wal-Mart actually rose last year, quite a feat for any company, let alone a retailer. But that was then and this is now. There will be no honeymoon for the new corporate chief. Duke is like a beginning swimmer who has been thrown in the deep end of the pool: either he will sink or swim, but he won't have much time to figure out to keep his head above water.











Reader Comments (Page 1 of 11)
2-01-2009 @ 12:30PM
mariselp9 said...
Wa-Mart takes advantage of loop holes in our labor laws. They keep on hand government financial help applications because they know that what they are paying their employees is not going to support their employees families. So, you think you're saving on a bottle of shampoo but you're just gonna turn around and help support the employee with your taxes. Now you tell me, does that seem fair to you? This worlds biggest and most powerful retailer is using your money to remain powerful. This is why they need a union in there to make them pay their employees fair wages and stop taking advantage of the American people!!
2-01-2009 @ 1:24PM
Mike McKibben said...
Open letter to Mike Duke, new CEO of Wall - China - Mart. I just bought my 4th (fourth) carpet cleaner (Bissell), made in CHINA, that you and Target sell. Like the 3 other ones before it, it didn't last 2 days before something failed on the machine. Hell, this one didn't last 1 minute. STOP buying this $hit from China, and start buying items made in the USA, by Americans! You can be part of the solution fo get this countries economy back on track, or you can be part of the problem.............as you have been for the past 10 years.
2-01-2009 @ 1:30PM
schhi said...
Of course Duke is going to have challenges; what new CEO doesn't? And all the unionites probably think they'll have better luck with him and Obama than then did with Scott and Bush. Not. Take a walk and talk in a Wal-Mart. You find very few unhappy people working there; or shopping there. And the reason for that is simple. Those working there have jobs, a very high percentage of them with healthcare and other benefits; those shopping there are saving money! Believe me, that is going to prove to be a very successful combination for Duke and for Wa-Mart's customers, associates and shareholders.
2-01-2009 @ 2:24PM
quebecpq said...
Mike McKibben said...
Where is my post
Don't be surprised this is AOL I have posted posts before and they have not made it through, If you said something that reflected truth and could offend someone the Liberals at AOL sometimes convieniently select to NOT post them.
As for WAL MART, I totally agree with the earlier post BUY AMERICAN and STOP buying China garbage. When I go to your store and shop ( and anywhere for that matter) I DO look to see where it's made, if it's made in USA and cost a little more it's sold, if it's made in China, I don't bother. This all junk, garbage and belongs in the Junk yard along with their cars
2-01-2009 @ 2:37PM
bob said...
ive never bought one video game at wallmart always target. time to catch up wallmart
2-01-2009 @ 2:38PM
Ina Ayliffe said...
:I have not set foot in a Walmart store in years, and I will not, until they pay their employees a living wage and affordable health insurance. Medicaid has to take care of their employees, and that means we the people are paying for it, while the Waltons stack up their billions. Just share some of it with your employees. It would be the best PR you could ever have. And try to go back to buying American. I am sick of seeing everything made in China. Go back to Sam's original vision for his store and buy and sell American.
2-01-2009 @ 2:36PM
somebody said...
MR.DUKE NEEDS TO BE MORE LIKE SAM WALTON. SINCE THE HEADS DECIDED MONEY IS THE ALMIGHTY god. THE COMPANY HAS LEADERS WHO DON'T CARE ABOUT THE LITTLE EMPLOYER WHO WORKS IN THE STORE.HE NEEDS TO TAKE APAGE FROM SEARSAND K-MART.REMEMBER THEY WERE ONCE THE BIGGEST. NOW WHERE ARE THEY. SEE HOW THEY GOT THERE.I WILLNOT SHOP WAL-MARTNIF IT CAN BE FOUND SOMEWHERE ELSE.KNOW MANY WHO FEEL THE SAME
2-01-2009 @ 2:37PM
Joe said...
Mike...How many do you have to buy before you get it?
2-01-2009 @ 2:39PM
ltrbalance said...
Happy employees at Walmart? not in the Mass. stores...always complaining about their jobs - in front of customers!
2-01-2009 @ 2:42PM
ron christopherson said...
Seems to me after buying a second time on anything, you would have learned a lesson!!! As for cheap prices- Wal-mart is not the cheapest as they continue to buy from foreign companies and don't bother to help out our nation. the only thing they have is a market for everything is why most of us are there!!!
2-01-2009 @ 2:46PM
marlann said...
whatever happened the the RED WHITE and BLUE colors you use to have.. what ever HAPPENED to being PROUD of AMERICA.. you sold out ... MADE IN AMERICA is what you should be worried about not buying from other countries...
2-01-2009 @ 2:52PM
Richard said...
"mariselp9 said...Wa-Mart takes advantage of loop holes in our labor laws. They keep on hand government financial help applications because they know that what they are paying their employees is not going to support their employees families. .... This is why they need a union in there to make them pay their employees fair wages and stop taking advantage of the American people!! "
When a person applies and accepts a job at Wal-Mart they are agreeing with what Wal-Mart is willing to pay them. If it doesn't support thier family then they need to go somewhere else and get a job that will. You can not blam Wal-mart for people accepting the job. If it was not acceptable then people would not be working there - they would go somewhere else and Wal-Mart would have to raise thier pay rates to allure workers to work for them.
Quit trying to blam coorporations that are hiring and willing to give people jobs right now. If you do not want to work for what they pay then better yourself with more schooling and quit looking for someone else to help you out.
2-01-2009 @ 2:53PM
stormsister426 said...
Stop patronizing this corporate giant.
Their product and business practices are disgusting.
Who cares if they have cheaper pricing. Have some integrity.
Break the Chains. Partonize small businesses.
Small businesses did not get us in the mess.
2-01-2009 @ 2:54PM
Virgil said...
Since Sam Walton died, so has the policies that he started. The same ones that kept customers coming back. His number one policy was to buy American. He even bought failing companies to keep them working and to keep his orders for goods coming in. He also started the deal that if there was pricing mistake and it was the stores fault, depending on how much it was you either got it free or at a discount. Now they stock items every which where, and you either pay the price or dont. I even had one get a managers approval on a return without a reciept. After the manager left, she still berated me about needing one. Also so many items they sell are made in China, you might as well call it China Mart. I only go there to save gas money and I buy very little there anymore. Since customer satisfaction policies have dropped I find less reasons to go there. I am willing to even spend more in gas than shop there. I am hoping they go broke anymore.
2-01-2009 @ 2:57PM
Julie A. Sullivan said...
I just want to comment on the food and dairy available at Wal Mart. The prices have shot up, and have stayed up, since the gas prices went crazy. You would think Wal Mart, with their advertised "roll back" of prices, would drop their prices now that the gasoline expense is lowered. Sure, Wal Mart's prices are lower than anyone else because they can buy a lot more than any other food and dairy retailer and also due to very low employee's wages. That doesn't make it right, though. Their bottom line if profit, baby, and that is why they do what they do. And don't tell me the workers are happy working there. Sure, they are happy they have a job - who wouldn't be? - but the working conditions are crappy and they have to deal with very rude customers. I have to go there and shop, as the prescriptions are the cheapest anywhere and their prices are low, but I hate it. I hate paying for those jerks to make any money and not pay their workers right.
2-01-2009 @ 2:58PM
dadsparkin said...
I have shopped at Wal-Mart since store #5 opened in Van Buren Arkansas. I don't buy anything there anymore except food and electronics and a few other things. All the clothes I have bought lately fall apart and some aren't sewed together correctly. Wal-Marts quality have gone massively downhill. Sam Walton would roll in his grave. Wal-Mart no longer represents American quality but Chinese cheapness. I would rather pay more money and get good well-built items than junk sold at Wal-Mart. They are good at replacing bad things but its only with more bad things.
2-01-2009 @ 4:56PM
t0nytrains said...
wake-up AMERICA
LETS START BRING BACK MADE IN THE USA. I TRY VERY HARD ,TO ONLY BUY MADE IN USA. WALMART SUCKS.
2-01-2009 @ 3:12PM
jregan592 said...
Everyone should watch the walmart movie.."the high cost of low prices". Very enlightening to know their track records from their shameful treatment of their employees (and the many lawsuits) to their lack of respect to the environment etc etc etc. My biggest gripe is that they sell crap that breaks and just fills our landfills. Pay a little more instead of the same junk in the trash. I never shop there but on the very rare occasions that I had no choice I would be lulled into seeing a great deal that would invariably break within a week. Headphones for my ipod did not work right out of the case returned and 2 days later one ear stopped working. I could go on and on but I won't.
2-01-2009 @ 3:16PM
bobandj99 said...
This is still America where Citizens have a choice. If you don't like the quality or price you can choose an alternative. Obam pelos soros would like to control what you do.
2-01-2009 @ 3:19PM
Sheila said...
Walmart helped create their own economy. They drove suppliers and mom and pop stores out of business giving many folks in rural communities no alternative places to work or shop. So much for fair competition in business.