Walmart has lost a ton of money on online shopping, in part because they bought businesses whose growth was stunted after their purchase. Not unlike Sears buying Land's End. KMart's squandering of money on businesses that ultimately had problems of their own is not unlike Walmart being stuck with Sam's and the weak operation they had in Japan.
Walmart's performance has mostly stagnated since the early '00s. Their model is based on volume and they sought to build volume with low margin areas like food (more equipment and labor intensive than general merchandise) and, later, electronics which is a commodity business. Their strength has always been supply chain management, but their poblems aren't amenable to technical fixes---they require a larger, more motivated laborforce at the store level and probably something other than the contracted-out sweatshop model for warehouses.
Sears and K-Mart's decline began before private equity when they actually did things that proved successful at least for awhile--KMart with its celebrity merchandise lines and even the initial rollout of Big KMart. Sears did well through the 80s with thing slike "the soft side of Sears" but couldn't sustain it. Sears was a mature, if dusty, brand that still had some good fundamentals like the, brand equity in hardlines, before being bought out. KMart had had more ups and downs and less focus. At this point Walmart is stuck with a very centralized system and a stigmatized brand. They're trying to play catchup online where the competition is bigger and more nimble (Amazon) and at the store level, they have competitors that will always beat them for profitable lines, like fashionable clothing or perishables on the food side as well as dollar stores that pick away at their lower income base. Walmart has a lot of parallels with KMart in the late 20th century, with some unique challenges, as well. The Walton family's need for the business as a piggy bank and institutional investors' desire for return on investment have really squeezed them--they really can't go lower on labor and they no longer can count on having new store construction subsuduzed by local government as it once was. If they were smaller they could let the business wither away like Dillard's, with profits used to buy back stock and inflate dividends, but they don't have that luxury.
arizonaguy wrote: ↑May 7th, 2021, 10:48 pm
rwsandiego wrote: ↑May 7th, 2021, 7:51 pm
Walmart is going down the same path as Sears and K-Mart did back in their respective days. It will take a while, but it won't end well.
I don't necessarily agree. Walmart, unlike the other two, doesn't seem to wait forever to abandon ideas that aren't working. Walmart, also unlike Sears and K-Mart, isn't afraid to try new ideas in the first place. What killed Sears and K-Mart was complacency and refusal to adapt which are two things that simply are not in Walmart's DNA.
Walmart has focused almost exclusively on digital over the past 2-3 years and has a very good online platform in place. I'd argue that this focus comes somewhat at the expense of its physical stores but Walmart was somewhat overstored anyways so even if it thins out its store fleet it really won't impact its overall sales. The digital offerings are actually drawing in customers of other retailers who like Walmart's additional options (especially during the pandemic).
I have noticed out of stocks (or pallets of goods simply piled in the aisles) at Walmart and this is something that needs to be addressed. Walmart consistently does have more out of stocks than its competitors do in my area. I know Walmart doesn't have issues getting the product to the store so they need to address why it isn't getting onto the shelves. As far as milk I have noticed that they have recently switched their dairy provider (at least in Arizona). They used to use Shamrock Farms here for most private label milk (Target and Sam's Club also use Shamrock Farms) but within the last month has switched to Sarah Farms (who Costco and WinCo also use).