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   Wal-Mart's next victims

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Topic: Wal-Mart's next victims (Read 730 times)

Rhune
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Wal-Mart's next victims
« on: Nov 15^th, 2004, 6:26pm »

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Forbes
Wal-Mart's next victims

The world's largest retailing machine is always looking for new worlds to conquer. Here are 5 that look particularly vulnerable, including banking and electronics.

When Toys "R" Us said in August that stiff competition from mass merchant Wal-Mart Stores was making it consider exiting the toy business, the news struck fear in the hearts of retailers everywhere.

After all, Toys "R" Us pioneered the "category killer" concept that's now employed by big-box specialty stores like Best Buy, Home Depot and Bed Bath & Beyond. The notion of creating giant specialty stores that cater to a particular product segment has become a staple of the U.S. economy. But Wal-Mart, the antithesis of a category killer with aisles stocked with a vast spectrum of products, is posing a dire threat to this way of business.

Wal-Mart had sales of $259 billion for fiscal 2004, ended Jan. 31, ranking it as the world's largest retailer. That sheer size has vaulted it to the No. 1 spot in categories as disparate as food, apparel, jewelry and home furnishings. For fiscal 2005, Wal-Mart plans to add 310 new stores and 30 new Sam's Clubs to its stable of 3,625 locations. Oppenheimer retail analyst Bernard Sosnick expects that by 2010, Wal-Mart will have 3,000 supercenters, up from 1,600 this year, and total company sales of half a trillion dollars.

That kind of growth will make Wal-Mart No. 1 in plenty of other product categories soon enough, and it will put an even tighter squeeze on existing players in arenas that Wal-Mart already dominates, like apparel and food. With a lion like Wal-Mart on the loose, no store is ever safe, but here we've identified five categories that that look particularly vulnerable to its looming threat.

Consumer electronics
Wal-Mart is the second-largest consumer electronics retailer in the U.S. behind Best Buy, but it won't be for long. This spring, it rolled out a private-label electronics line, ILO, which thus far includes low-priced 42 inch plasma TVs, LCD monitors and DVD recorders. That move put electronics stores large and small on notice, as have Wal-Mart's efforts to boost its brand partnerships, introducing Sony and expanding its relationships with Panasonic and RCA. Says retail analyst Howard Davidowitz, "They are going to fry Best Buy's brains out."

Banking
The superstore has been trying to get into banking for five years, but its efforts to buy banks in California, Oklahoma and Canada were thwarted by regulators. Wal-Mart has a ready-made market at hand: 20% of the 100 million customers that come through its doors weekly don't have bank accounts. The chain already offers financial services such as check cashing, bill payment and money orders, and it boasts 28 Wal-Mart Money Centers, which are operated by SunTrust Banks, as well as hundreds of other in-store bank branches. The company says it has no plans to get into retail banking, but industry sources say Wal-Mart is still pushing this agenda quietly and is expected to take another run at banking again.

Pharmacy
Wal-Mart ranks fourth in the pharmacy business, behind giants Walgreen, CVS and Rite Aid, according to the National Association of Chain Drug Stores. But it is upgrading its profile, rolling out a handful of 24-hour pharmacies in August. Pharmacies are low-margin propositions, and people with health insurance who pay only co-payments aren't price-sensitive. That could put a kink in Wal-Mart's strategy of squeezing supply chains to push down retail prices. But for the shoppers who don't have insurance, many of them its customers, Wal-Mart's brand of competitive pricing would be just what the doctor ordered.

Gasoline
Gas pumps are a huge traffic driver for Wal-Mart. There are 1,555 stations on Wal-Mart properties, 300 of which are operated directly by Wal-Mart's warehouse arm Sam's Club and the rest by third-party vendors like Murphy USA. Launched in 1996, its pumps already have a 3% share of U.S. retail gas sales -- the 10th largest in the U.S. As Wal-Mart's share grows, the only question is whether Wal-Mart will oust its vendors and go it alone. Independent gas suppliers are growing as the oil giants spin off their refineries, which makes that kind of a move plausible, and the sheer number of Wal-Mart locations makes it an appealing partner. Says retail analyst Kurt Barnard, "The volume they could offer would be of enormous interest to refineries."

Fashion
Wal-Mart may lead the apparel market, but it does so with the sale of mundane items like underwear, socks and sweatshirts. Analysts say that Wal-Mart is losing sales of fashion items to companies like J.C. Penney, Kohl's and Target, which has had articular success with its lines from Isaac Mizrahi and Liz Lange. Wal-Mart is now gunning for a hipper milieu with George, the No.1-selling British apparel brand that Wal-Mart landed when it bought its parent, U.K. retail giant Asda, in 1999. Wal-Mart also stocks the Mary-Kate and Ashley line, licensed from the famed Olsen twins. Look for the retail giant to start sprucing up its clothing displays and marketing these brands more heavily as it reinvents its fashion sense.

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Rupey
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Re: Wal-Mart's next victims
« Reply #1 on: Nov 15^th, 2004, 8:33pm »

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Still, I'm compelled to shop at Walmart because their prices on just about everything are so much better than their competitors. For a family on a limited income, that's very important.

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AoM
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Re: Wal-Mart's next victims
« Reply #2 on: Nov 16^th, 2004, 7:00am »

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I shop at Walmart only when absolutely necessary. I don't like it there. I would much rather go to a mall or to Target

Wal-Mart does NOT treat its employees well at all. It just leaves a bad taste in my mouth.

Walmart is the epitome of corporate America

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azure
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Re: Wal-Mart's next victims
« Reply #3 on: Nov 16^th, 2004, 8:49am »

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I have to admit, I shop walmart

there prices are great

Roll Eyes

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Rhune
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Re: Wal-Mart's next victims
« Reply #4 on: Nov 16^th, 2004, 2:09pm »

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I rarely shop at wal-mart, but I do from time to time, more because of their hours than anything. Where I live, they are the only "mart" store open 24 hours a day. I prefer Target and we shop there most often, but they close by 10pm and I get off work at 9pm so depending on what all is going on, sometimes I can't make it in time.

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shamon
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Re: Wal-Mart's next victims
« Reply #5 on: Nov 16^th, 2004, 2:12pm »

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my mom works there... can't bite the hand that feeds you...

prices, prices, prices..... oh and convenience... keeps em coming back everytime...

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Rhune
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Re: Wal-Mart's next victims
« Reply #6 on: Nov 16^th, 2004, 2:13pm »

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At the same time...I hate what they are doing to other businesses. It's similar to the whole outsourcing thing. They are putting these other companies out of business and taking over, eating away higher paying jobs and providing minimum wage fare. Somewhere along the way, something's gotta give...

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shamon
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Re: Wal-Mart's next victims
« Reply #7 on: Nov 16^th, 2004, 3:15pm »

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walmart: radio 10.00
store B: same radio 18.00

Where do you get your radio?

In the end, do we worry about the other company (ie. business ethics) or ourselves?

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When others demand that we become the people they want us to be, they force us to destroy the person we really are. It's a subtle kind of murder. The

luci
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Re: Wal-Mart's next victims
« Reply #8 on: Nov 16^th, 2004, 5:35pm »

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Since we are retired, I look at the cost and take the best buy wherever it is!
I love Toys R US and love to go there at this time of year and purchase for the Grandchildren. Which reminds me to go next week, for their value catalog is out. After Thanksgiving weekend we will have to take what is left at both stores.

I also like Target and purchased early there last year only to find other sotres, such as Wal-Mart had a better price. With 10 Grandchildren to buy for, you go for the best value and price!

Angel, if you're a high paid doctor you won't ever have to be concerned about these things.
We like to have extra money to travel!

« Last Edit: Nov 16^th, 2004, 5:35pm by luci »

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lakelady
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Re: Wal-Mart's next victims
« Reply #9 on: Nov 16^th, 2004, 5:49pm »

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When you live in a smaller city like mine, there is only one WalMart and they have no competition. So customer relations suck. They could care less. So no, I'm not a big fan. I ONLY go there for a couple of products that no one else carries.

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Rupey
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Re: Wal-Mart's next victims
« Reply #10 on: Nov 16^th, 2004, 6:28pm »

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We go to a Walmart that is about 20 minutes from where we live. Next year they are building one closer to us--about five to ten minutes away.

Our customer service is pretty nice. The two things that I personally can't stand about Walmart are: a) the parking lot (always overcrowded) and b) the screaming brats. Why does it seem that people are always taking their "I-need-a-nap-in-the-worst-way" toddlers and their "If-you-don't-buy-me-this-right-now-I'll-continue-my-dramatic-meltdown" kids? Whatever happened to discipline and good manners?

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shamon
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Re: Wal-Mart's next victims
« Reply #11 on: Nov 17^th, 2004, 8:45am »

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My mom works there she says the same thing, Rupey...

The kids are crying sooooo...

a) take the kid home, and kick the parent in the tail because the kid is tired..

b) kick the kid in the tail because he is a brat....

Luci...
10 granchildren!!!!! WOW!!!!!

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When others demand that we become the people they want us to be, they force us to destroy the person we really are. It's a subtle kind of murder. The