Wal-mart

[Mith242]

I've been getting behind posting Wal-mart news. This is old news but they are pulling out of Germany. They've never had much luck being appealing to the German consumers for some reason. Seems like public opinion is even more negative over there than it is here. In other related news Tom Coughlin only got 27 months of house arrest for basically stealing $100,000. What a joke. I'm sure many people wish they could do what he did and only get 27 months of house arrest.

[Aporkalypse]

I've been getting behind posting Wal-mart news. This is old news but they are pulling out of Germany. They've never had much luck being appealing to the German consumers for some reason. Seems like public opinion is even more negative over there than it is here. In other related news Tim Coughlin only got 26 months of house arrest for basically stealing $100,000. What a joke. I'm sure many people wish they could do what he did and only get 26 months of house arrest.

I've always loved following Wal-Mart and its corporate goings on. I'm just glad that there weren't more guys like Coughlin and corporate fraud issues within the company which could really adversely affect NWA. I think there are too many checks and balances in the company for it ever to become a WorldCom, though.

The house arrest is a joke. Send a multimillionaire to two years of house arrest where he can dine on pate and porterhouses every night and enjoy his pool and expansive farm. Great punishment. The same thing happened to Jose Canseco once and that was a joke as well.

There are some interesting goings on internationally with WM pulling out of Germany and generally struggling in Europe. WM employees are unionizing in China and it is facing stiff competition from international companies there including a prominent one in France. Walmex generally seems fairly successful. Wal-Mart is considering a foray into Australia. It's not clear where Wal-Mart's foray into banking will go but I think it is only a positive if it can get away with it. The E85 fuel proposition is intriguing and has enormous potential. Then there are newer stores slanting towards a more upscale appeal in suburban and affluent urban areas.

Personally, I think that Wal-Mart won't do well internationally and really should restrict the regions it is attempting entry into. I think Mexico and other parts of Latin America offer the most potential. Australia is intriguing as in many ways it is similar to America and the distribution and economic scale model could work well there.

I think WM's going to face stiff competition in urban/suburban markets against Target and grocery chains and it's upscale movement still puts it two notches below Targets (the WM in Plano everyone discussed is only about 1-2% different than the new one in West LR). I think where WM has the most potential is in adding services to existing stores like banking and if possible the E85. All that does is generate revenue at minimal added cost. I like WM's slicker advertising though they have miles to go in being internet-friendly and trendy from a web perspective.

I think the stagnation will continue for now but I think the current execs are doing a lot to change the company's perception that may allow future growth. I think the "evil empire" concept of Wal-Mart is less true now than it was two years ago.

I'm not buying stock, though, not yet.

[Mith242]

I've always loved following Wal-Mart and its corporate goings on. I'm just glad that there weren't more guys like Coughlin and corporate fraud issues within the company which could really adversely affect NWA. I think there are too many checks and balances in the company for it ever to become a WorldCom, though.

The house arrest is a joke. Send a multimillionaire to two years of house arrest where he can dine on pate and porterhouses every night and enjoy his pool and expansive farm. Great punishment. The same thing happened to Jose Canseco once and that was a joke as well.

There are some interesting goings on internationally with WM pulling out of Germany and generally struggling in Europe. WM employees are unionizing in China and it is facing stiff competition from international companies there including a prominent one in France. Walmex generally seems fairly successful. Wal-Mart is considering a foray into Australia. It's not clear where Wal-Mart's foray into banking will go but I think it is only a positive if it can get away with it. The E85 fuel proposition is intriguing and has enormous potential. Then there are newer stores slanting towards a more upscale appeal in suburban and affluent urban areas.

Personally, I think that Wal-Mart won't do well internationally and really should restrict the regions it is attempting entry into. I think Mexico and other parts of Latin America offer the most potential. Australia is intriguing as in many ways it is similar to America and the distribution and economic scale model could work well there.

I think WM's going to face stiff competition in urban/suburban markets against Target and grocery chains and it's upscale movement still puts it two notches below Targets (the WM in Plano everyone discussed is only about 1-2% different than the new one in West LR). I think where WM has the most potential is in adding services to existing stores like banking and if possible the E85. All that does is generate revenue at minimal added cost. I like WM's slicker advertising though they have miles to go in being internet-friendly and trendy from a web perspective.

I think the stagnation will continue for now but I think the current execs are doing a lot to change the company's perception that may allow future growth. I think the "evil empire" concept of Wal-Mart is less true now than it was two years ago.

I'm not buying stock, though, not yet.

Yeah I do agree that they should consider what markets they get into. I think they're holding their own in Britain but the rest of Europe isn't going too great for Wal-mart. Although Germany was always the worst. What about Asian, how do you see that? Granted that's a big continent, we should probably break that down into smaller area. But I think Asia could do well for Wal-mart as well. Even dense areas like east China seem to be doing well so far for Wal-mart. I think the biggest problem is having to deal with the government of China itself.

[mcheiss]

Wal-Mart is considering a foray into Australia. It's not clear where Wal-Mart's foray into banking will go but I think it is only a positive if it can get away with it. The E85 fuel proposition is intriguing and has enormous potential. Then there are newer stores slanting towards a more upscale appeal in suburban and affluent urban areas.

I think Mexico and other parts of Latin America offer the most potential. Australia is intriguing as in many ways it is similar to America and the distribution and economic scale model could work well there.

Wal-Mart will be moving into the more upscale suburban markets of America. I've heard mentionings of Chicago, Atlanta, Los Angeles, etc suburbs for future stores. Houston and Dallas are good markets as well.

Australia may not be very sucessful IMO. Australia already has a well established grocery chain (Not sure on the name), but it was started by a former Wal-Mart Exec. The stores have Door Greeters, Smocks, etc, just like WM.

[Mith242]

Wal-Mart will be moving into the more upscale suburban markets of America. I've heard mentionings of Chicago, Atlanta, Los Angeles, etc suburbs for future stores. Houston and Dallas are good markets as well.

Australia may not be very sucessful IMO. Australia already has a well established grocery chain (Not sure on the name), but it was started by a former Wal-Mart Exec. The stores have Door Greeters, Smocks, etc, just like WM.

Weird, never knew that about Australia. Wonder what made the former exec to go to Australia and start a similar type store.

[mcheiss]

Weird, never knew that about Australia. Wonder what made the former exec to go to Australia and start a similar type store.

Why else, Bigger Bucks.

[Mith242]

Why else, Bigger Bucks.

I guess I meant seems like an odd place to go. Although I suppose it's a good place to go if you were looking for another English speaking country to go into with something like that.

[mcheiss]

I guess I meant seems like an odd place to go. Although I suppose it's a good place to go if you were looking for another English speaking country to go into with something like that.

With plenty of disposable income as well.

[Aporkalypse]

Yeah I do agree that they should consider what markets they get into. I think they're holding their own in Britain but the rest of Europe isn't going too great for Wal-mart. Although Germany was always the worst. What about Asian, how do you see that? Granted that's a big continent, we should probably break that down into smaller area. But I think Asia could do well for Wal-mart as well. Even dense areas like east China seem to be doing well so far for Wal-mart. I think the biggest problem is having to deal with the government of China itself.

China is interesting. I don't know enough about it to understand how this unionization will affect things there.

The UK isn't doing that well. There are a limited number of smaller stores. One thing about the UK and Europe in general, people more often use public transportation and go by their small neighborhood grocery for a few items each day on their way home. Megastores are rare and difficult to many to get to. I just don't know how practical the scheme is over there.

Wal-Mart will be moving into the more upscale suburban markets of America. I've heard mentionings of Chicago, Atlanta, Los Angeles, etc suburbs for future stores. Houston and Dallas are good markets as well.

Australia may not be very sucessful IMO. Australia already has a well established grocery chain (Not sure on the name), but it was started by a former Wal-Mart Exec. The stores have Door Greeters, Smocks, etc, just like WM.

I think the question is how successful they will be. In larger cities and suburbs with lots of alternatives WM is very inconvenient and difficult to get in and out of. It definitely also has a bit of a "ghetto" feel, as the clientele is different than what's in grocery stores and Targets. It is very popular with Hispanics in Texas and that might be true in Southern California and Chicago as well. However, opposition to WM in these areas is very strong. WM has had multiple setbacks in trying to get new stores built in CA. Chicago passed a law that stores doing over a certain volume had to pay their employees $10 an hour or more and this was specifically targeted at Wal-Mart. Texas loves WM, no doubt, but it's a different market. WM is decidedly inconvenient and less upscale and I think WM will have an uphill battle in some markets, though not in all. I don't think you'll see WM in the nicer suburbs or urban areas. Even in DFW's newest "posh" suburb, Southlake, the city of almost 30,000 refused to allow them.

The other issue I don't think I've seen really mentioned often is that I think Walgreen's and CVS are hurting Wal-Mart in urban and suburban areas. In cities like Dallas I have to pass 4 of them to get to WM and they're mostly 24 hours and function as a discount convenience store with prices every bit as good as Wal-Mart. Granted, you can't buy tires or plasma TVs there but I think it hurts a big WM niche and this will become an increasing problem as these chains continue to expand and permeate suburban and urban America. To be honest, if I need Cokes, light bulbs, christmas cards, diapers, etc Walgreen's is all too convenient. Driving 10 minutes (as opposed to 1 min) to hit a crowded parking lot and wait in line for twenty minutes usually keeps me away from Wal-Mart.

I didn't know that about Australia. That sounds like a significant missed opportunity. Australia's cities are set up much more like American ones and would be more amenable to a big box retail approach.

I guess I meant seems like an odd place to go. Although I suppose it's a good place to go if you were looking for another English speaking country to go into with something like that.

If there's one nation in the world that is most similar to the U.S. in terms of retail structure (after Canada) it's Australia. It's a much better target for an American company than Europe or Asia.

[Mith242]

Yeah and while Canada is rather close and probably has a lot of the same competition that you'd find here in the US. Australia has a decent population, New Zealand might be a bit small for many to consider for business. And as far as other English speaking countries I think Britain would be a hard country to break into as well, for reasons you mentioned earlier.

[mcheiss]

The other issue I don't think I've seen really mentioned often is that I think Walgreen's and CVS are hurting Wal-Mart in urban and suburban areas. In cities like Dallas I have to pass 4 of them to get to WM and they're mostly 24 hours and function as a discount convenience store with prices every bit as good as Wal-Mart. Granted, you can't buy tires or plasma TVs there but I think it hurts a big WM niche and this will become an increasing problem as these chains continue to expand and permeate suburban and urban America. To be honest, if I need Cokes, light bulbs, christmas cards, diapers, etc Walgreen's is all too convenient. Driving 10 minutes (as opposed to 1 min) to hit a crowded parking lot and wait in line for twenty minutes usually keeps me away from Wal-Mart.

Interesting about Southlake, I would have thought they would allow them.

I agree about Wal-Mart's terrible parking, it's an issue we have tried solving. You really can't do much except increase the width of parking lots for less inconvienance and allow for traffic lights outside of the store for easier access. One interesting thing, a bit off topic, but Wal-Mart is putting 24 Hour Pharmacies in stores to compete against CVS, Walgreens, etc.

[Mith242]

Interesting about Southlake, I would have thought they would allow them.

I agree about Wal-Mart's terrible parking, it's an issue we have tried solving. You really can't do much except increase the width of parking lots for less inconvienance and allow for traffic lights outside of the store for easier access. One interesting thing, a bit off topic, but Wal-Mart is putting 24 Hour Pharmacies in stores to compete against CVS, Walgreens, etc.

I've been a little surprised it took wal-mart this long to do the 24 hour pharmacies.

[mcheiss]

I've been a little surprised it took wal-mart this long to do the 24 hour pharmacies.

I think it's in about 1,000 stores, it's been around for around a year. I know the Pleasant Grove Wal-Mart in Rogers has the 24 Hour Pharmacy deal.

[jdevers]

Yeah and while Canada is rather close and probably has a lot of the same competition that you'd find here in the US. Australia has a decent population, New Zealand might be a bit small for many to consider for business. And as far as other English speaking countries I think Britain would be a hard country to break into as well, for reasons you mentioned earlier.

Canada actually has a noticeably larger population than Australia. The 7/1/05 population estimate for Australia was 20,090,400, and for Canada at the same time it was 32,805,000. http://citypopulation.de/WorldPop.html Also, most of Australia's population is centered into cities as the inside is right up there with the most uninhabitable places on Earth while the coasts are near paradise. Australia is actually one of the most urban countries on Earth, with about 13 million people living in its five largest cities. Of course, Sydney and Melbourne are the only two cities we would truly consider to be large as the Brisbane only has the population of a moderate second tier city in the US and is the third largest city in the country (Sydney and Melbourne only have about 4 million each, so aren't exactly megalopoli themselves) so it might be more amenable to WM than the large NA markets. But you are still talking about a country the size of the US with the population of Texas, it won't be a huge untapped market.

[Mith242]

Canada actually has a noticeably larger population than Australia. The 7/1/05 population estimate for Australia was 20,090,400, and for Canada at the same time it was 32,805,000. http://citypopulation.de/WorldPop.html Also, most of Australia's population is centered into cities as the inside is right up there with the most uninhabitable places on Earth while the coasts are near paradise. Australia is actually one of the most urban countries on Earth, with about 13 million people living in its five largest cities. Of course, Sydney and Melbourne are the only two cities we would truly consider to be large as the Brisbane only has the population of a moderate second tier city in the US and is the third largest city in the country (Sydney and Melbourne only have about 4 million each, so aren't exactly megalopoli themselves) so it might be more amenable to WM than the large NA markets. But you are still talking about a country the size of the US with the population of Texas, it won't be a huge untapped market.

yeah but it would seem that there would be much of the same competition in Canada that you'd have here in the US. Also perhaps the ex-exec wanted to go where he wouldn't be competing against Wal-mart.

[mcheiss]

Yeah and while Canada is rather close and probably has a lot of the same competition that you'd find here in the US. Australia has a decent population, New Zealand might be a bit small for many to consider for business. And as far as other English speaking countries I think Britain would be a hard country to break into as well, for reasons you mentioned earlier.

Wal-Mart does have stores in Britain, it's called ASDA. It does quite well actually, even if it is #2 in the nation.

[Mith242]

Wal-Mart does have stores in Britain, it's called ASDA. It does quite well actually, even if it is #2 in the nation.

Yeah Aporkalypse and I were talking about that. I was thinking they were doing okay in Britain compared to the rest of Europe but he wasn't under that impression. But overall I do see his point. Just the store setup is a hard thing to do over in Europe. They seem to still prefer smaller type retail that focuses on certain things, not a super market type format.

[Julles]

Weird, never knew that about Australia. Wonder what made the former exec to go to Australia and start a similar type store.

IMO, the shopping in Australia is crappy. I couldn't find much of anything I liked - very weird fashions, and none of the stores seemed up to par with what we have, although Target came the closest. My BIL took me to what was supposed to be the best mall in Melbourne, and I was not impressed at all. Maybe Sidney has more to offer.

On a side note, we found a strong undercurrent of racism in Australia. I would say they have as bad a problem as we do, if not worse. Asian immigrants are not welcome - AT ALL. Apparently there has been a tide of immigrants from Asia over the last 30-40 years, and the white native population is feeling threatened. We saw racist graffiti, heard racist comments, and most of all, felt that we were not welcome to be there. The white Australians would speak to me, but it was as if my husband and children did not exist. I'm hoping they can work through this over the next couple of generations. The young people did seem to mingle quite a lot; the middle aged and older folks kept to their own races.

[Aporkalypse]

Interesting about Southlake, I would have thought they would allow them.

I agree about Wal-Mart's terrible parking, it's an issue we have tried solving. You really can't do much except increase the width of parking lots for less inconvienance and allow for traffic lights outside of the store for easier access. One interesting thing, a bit off topic, but Wal-Mart is putting 24 Hour Pharmacies in stores to compete against CVS, Walgreens, etc.

I don't think the issue with Walgreens/CVS is the pharmacy itself, it's the fact that in major cities and suburbs it is increasingly becoming a hybrid between your local grocery store and a corner convenience store, filling a niche that WM was/is exploring with Neighborhood Markets but doing so with considerably more success.

The pharmacy issue is secondary. Walgreen's and CVS make most of their money from the pharmacy and their drug prices are quite high, which most people with insurance never notice because of a set copay. WM on the other hand makes most of its income from the retail store and the pharmacy is an ancillary service but prices are actually very reasonable. It's not the fact they have 24 hour pharmacies that hurts WM, just the fact they are open 24 hours. I don't think the two pharmacy chains are making money hand over foot considering what they are spending on expansion right now but I do think that filling this niche is hurting WM some and this will only become more impressive. I don't think its the pharmacies that hurt WM, it's the convenience of being able to get in and out of a store in 5 minutes and still get low prices when there's a store on every corner in big markets.

While WM/ASDA is the 2nd largest grocer in GB right now, that wasn't earned by growth but was purchased. I thought they were at least the 3rd biggest retailer in Germany as well before bailing. They are trying a variety of concepts including U.S.-style supercenters, ASDA groceries, and specialized stores like George. They are still trying to figure out which direction will be most profitable at this point. I think it will be years before we see whether the investment will yield a sufficient return to say it was worth the enormous up-front investment. Having lived in the U.K. for a while, I have my doubts about it. For every big (which in the UK has a much different meaning) chain store (my favorite was Marks and Spencer), there are twenty small locally owned coops or groceries where you can go pick up your dinner items when walking home from your bus stop, etc. There's one in short walking distance from 95% of the homes in Britain. That's the mountain you have to climb if you are WM but the big chains will have a significant advantage when it comes to price.

I still think the money for WM is in adding ancillary services to existing stores - WM is the mall of the town under 20,000. Adding fast food restaurants, barbers, photo studios, etc as well as gas stations, banks, etc will up the revenue at each store and create one stop shopping in smaller towns even more than it already does. In those locations with limited options nobody cares about the parking issues and all classes end up shopping there.

[masons_dad1]

IMO, the shopping in Australia is crappy. I couldn't find much of anything I liked - very weird fashions, and none of the stores seemed up to par with what we have, although Target came the closest. My BIL took me to what was supposed to be the best mall in Melbourne, and I was not impressed at all. Maybe Sidney has more to offer.

On a side note, we found a strong undercurrent of racism in Australia. I would say they have as bad a problem as we do, if not worse. Asian immigrants are not welcome - AT ALL. Apparently there has been a tide of immigrants from Asia over the last 30-40 years, and the white native population is feeling threatened. We saw racist graffiti, heard racist comments, and most of all, felt that we were not welcome to be there. The white Australians would speak to me, but it was as if my husband and children did not exist. I'm hoping they can work through this over the next couple of generations. The young people did seem to mingle quite a lot; the middle aged and older folks kept to their own races.

I've heard about the racism in Australia, although I've never been there. I guess it hasn't been that long since the White Australia policy was abolished in Australia (1973). Another interesting thing is that due to low levels of Australian birth rates that there may be fewer "native-born" Australians than immigrants by 2100.

[Mith242]

IMO, the shopping in Australia is crappy. I couldn't find much of anything I liked - very weird fashions, and none of the stores seemed up to par with what we have, although Target came the closest. My BIL took me to what was supposed to be the best mall in Melbourne, and I was not impressed at all. Maybe Sidney has more to offer.

On a side note, we found a strong undercurrent of racism in Australia. I would say they have as bad a problem as we do, if not worse. Asian immigrants are not welcome - AT ALL. Apparently there has been a tide of immigrants from Asia over the last 30-40 years, and the white native population is feeling threatened. We saw racist graffiti, heard racist comments, and most of all, felt that we were not welcome to be there. The white Australians would speak to me, but it was as if my husband and children did not exist. I'm hoping they can work through this over the next couple of generations. The young people did seem to mingle quite a lot; the middle aged and older folks kept to their own races.

Sorry to get this more off-topic. But I guess I found your statements interesting. I know there have been some problems because for a long time Australia was like the Ozarks, basically just white. But there has been a lot of Asian immigration in recent decades. From my understanding as well Australian officials are also trying to make more of an effort to increasing ties with Asia since that's the continent closed to them. While some racism wouldn't be a surprise to me I wouldn't have guessed it would be that bad as you mentioned. I had gotten the impression it wasn't that bad. But I don't have any personal experiances to go by. I also wonder what the Australian economy was like when you were there. Anytime the economy takes a dive it always seems like it's the foreign immigrants who take the brunt of the blame.

[Aporkalypse]

I was reading this article from Forbes and remembered our discussion here so I thought I'd post it.

Wal-Mart Losing Battle of Britain

[Mith242]

Thanks for posting that. I guess I had thought their British stores were doing better than that. I also don't know if I heard that they pulled out of South Korea either.

[Aporkalypse]

Thanks for posting that. I guess I had thought their British stores were doing better than that. I also don't know if I heard that they pulled out of South Korea either.

They did, and their main competitor there E-Mart is doing exceptionally well. Their stores tend to be more marketplace-like and appeal to Asian cultures. Apparently E-Mart is considered to be a major threat in China.

E-Mart supposedly fuses some concepts of large discount stores like Wal-Mart with the traditional marketplace.

British retailer Tesco is supposedly going to aggressively open stores on the U.S. West Coast soon and is a threat both Target and WM are taking seriously as they are supposed to be very stylish and trendy at prices similar to WM and Target. I'm pretty unfamiliar with Tesco and it will be interesting to see where this experiment leads. It could provide another option in urban and suburban markets but I would doubt it would threaten WM in rural areas.

[Aporkalypse]

I read something interesting today - Wal-Mart will be opening Communist Party kiosks in its Chinese stores. I think it has something to do with the recent union concessions they made but nonetheless the irony was interesting.