Not Worried About Wal-Mart
February 11th, 2008 | by rachel |
With all the negative attention directed at the economy, the true signs of panic may have officially surfaced. At least two recent headlines indicate concern that Wal-Mart, the American icon of consumption, is in trouble. Frankly, it’s hard to believe that! Seriously, do these numbers represent trouble to you - $345 billion in sales - 6800 stores/facilities worldwide - 127 million store visitors per week in the U.S. ? There is no doubt that the U.S. economy is struggling. All indications are that things will get worse before they get better. Even so, in spite of high gas prices, rising grocery costs, huge debt loads and maxed out credit limits, I have yet to find a parking place reasonably close to a Wal-Mart entrance. I am a lot of things but worried about Wal-Mart isn’t one of them! Here are 4 reasons why you shouldn’t be either…
1. Sales are not going backwards. The sales figures being reported represent, at worst, no gain. At best, sales are up. Actual sales didn’t meet projected numbers but, most importantly, they didn’t drop. So, the problem is not that sales are not up. Rather, the “problem” is that sales are not up ENOUGH.
2. Convenience counts. Wal-Mart has what people need AND much of what they want. Especially when money is tight, being able to minimize shopping trips and locations will save money. With its combination of general retail, grocery stores and wholesale clubs, the company is in a position to offer something to everyone as well as offering everything to some.
3. Low prices are attractive. All things being equal, noone wants to pay more for something than they have to. In better economic situations, consumers may not be as likely to choose Wal-Mart for pricing alone. In a difficult economy, though, Wal-Mart is in a position to stay flat or gain slightly where other retailers may lose ground. Because Wal-Mart’s success is built on offering the lowest prices always, no matter what the economic situation is, they become the most obvious choice during the times when every penny counts.
4. Technology makes a difference. In spite of its beginning in the rural South, Wal-Mart has developed a technology-rich infrastructure and distribution network. Each item that is sold is tracked electronically and customized inventories for specific stores are developed and routed from distribution centers “on-demand”. In other words, every time a pack of gum is rung up at a Wal-Mart cash register, the records in the store and at the distribution center reflect that. When the store needs more gum, it gets sent to that store. Additionally, Wal-Mart is putting time and money into becoming more energy-efficient throughout the world. Technology allows Wal-Mart to save money on its own cost of doing business. Ultimately, that makes a difference to customers that are saving money when they shop there.
Believe it or not, I am not a big Wal-Mart fan. I don’t go out of my way to get to one and I would rather do LOTS of other things than shop in a Supercenter. For some reason, I prefer NOT to buy my frozen pizzas, potting soil and diamond jewelry in the same place! In spite of those things, it’s hard to argue with the selection and prices that Wal-Mart offers. Bottom Line - shopping there costs less. As for the economy, it’s going to be a difficult year for all of us. I hope Wal-Mart can hang on and take care of itself. I think my bank account needs my attention worse than they do. After all, if Wal-Mart REALLY IS in trouble, we may never shop again!